KUALA LUMPUR: Sapura Energy Bhd sees good chances for its engineering and construction (E&C), drilling, as well as exploration and production (E&P) businesses to be profitable in the next 12 months due to opportunities that will drive the utilisation of its assets.
President and group CEO Tan Sri Shahril Shamsuddin (pix) said it is confident that at least two of the three businesses, including E&P, will be profitable this year.
“We’re still under-utilised so we need to push utilisation in the rigs (drilling) and E&C. We should be able to show progress this year and even more next year,” he told a press conference after the group’s AGM here today.
According to its financial statement for the financial year ended Jan 31, 2019 (FY19), the E&P segment recorded a pre-tax profit of RM88.6 million, including a gain on disposal.
The E&C segment recorded a pre-tax loss of RM120.5 million after impairments and excluding provisions, while the drilling segment recorded a pre-tax loss of RM213.2 million, after impairments and excluding a provision.
In the first quarter of FY20, E&P recorded a pre-tax loss of RM7.5 million, while E&C’s pre-tax profit stood at RM48.0 million and drilling saw a pre-tax loss of RM51.0 million.
“We’ll do it (turn around at group pre-tax level) when our utilisation crosses 70% both for drilling and E&C businesses.”
For E&P, Shahril said it is on track to producing its first gas in SK408 (Gorek, Larak and Bakong fields in offshore Sarawak) before year-end.
Shahril said this is the company’s focus in the short term and as production ramps up, this is where the value driver is the biggest. It also has exploration assets in New Zealand, Mexico and Australia.
In drilling, Shahril said its rigs are at 50% utilisation and he sees it moving to 70% quickly.
“In the next 12 months, we see more rigs being deployed and this is encouraging for our rig business. E&C in the next 12 months will continue to book in more contracts and start to implement the projects that they started beginning of the year which will also ramp up utilisation.”
Sapura Energy’s order book stands at RM17.3 billion, comprising Asia (RM9.6 billion), the US (RM6.6 billion), Europe, the Middle East & Africa (RM800 million) and Australia (RM300 million). Its tender book is worth US$6.8 billion (RM28 billion) of which over 50% is in Africa and the Middle East.
Shahril said margin is going to be similar and in the same range compared with its peers in the business.
“We’ve gone through three years of conditioning from our clients that have been pressing down the margin and price and they’re not going to let it go easily until assets are being soaked up, only then we will see the movement in margins move up.”
Shahril expects crude oil price to sustain at the US$60-65 a barrel level for the next two years on the back of global growth and strong shale which will provide opportunities for contracts.
“I believe we’re at where oil price is going to be for a while. US$60-65 is the window that is going to hover around for the next couple of years, but it is enough with the stability of oil for oil companies to approve their development programmes. We’re seeing that in the number of bids that we’ve been invited to go to,” explained Shahril.
He added should the oil price fall below the US$60 a barrel level for a long time, there will be less opportunities for contracts.
Meanwhile, Shahril said it will continue to develop its services in the renewable energy ssector and continue to form partnerships to build wind farms after securing its first offshore wind farm contract in Taiwan recently. It has submitted a tender in Europe worth €120 million (RM554 million) for the installation of wind farms and will tender for another job there.
He said the contribution from RE will be significant in the future and if successful, will make up around 10-15% of its revenue in two to three years.
“We can use existing assets which will drive utilisation. We will see more and more wind farms be deployed so this is going to be encouraging for us,” said Shahril.
KUALA LUMPUR, July 17 — Maxis Bhd has inked a memorandum of understanding with the Sarawak Multimedia Authority (SMA) to collaborate on the Internet of Things (IoT) and Narrowband-Internet of Things (NB-IoT) initiatives. In a statement, Maxis said…
KUALA LUMPUR: Yinson Holdings Bhd is optimistic that it can take on more projects in the future if it manages to secure favourable terms from its clients, according to its CEO Lim Chern Yuan.
Currently, the floating, production, storage and offloading (FPSO) service provider is bidding for five projects, namely Marlim 1 & 2 and Parque de Baleias in Brazil, Greater Pecan in Ghana and Limbayong in Malaysia.
“We have been bidding more and we are optimistic can secure the jobs. The main factor is not because there has been a significant increase in jobs globally, but rather there is a significant decline of the numbers of players in the business as many are not able to survive the downturn in the last couple of years,” Lim said at a press conference after Yinson’s AGM here today.
He believes the sector is ripe for expansion after the oil price downturn.
“The view is that there is not enough FPSO players in the world at the moment to pick on the anticipated jobs coming up,” he said.
Yinson is waiting to deploy two vessels, FPSO Helang and FPSO Abigail-Joseph.
FPSO Helang is in the commissioning phase and is expected to arrive in Miri, Sarawak, from China within the next two months and start contributing towards the end of this year. It will be redeployed under a bareboat charter of an FPSO facility valued at about RM3.37 billion, and an operations and maintenance contract worth about RM2.35 billion, to JX Nippon.
FPSO Abigail-Joseph is expected to contribute to the group’s earnings within the first or second quarter of next year, with a maximum value of about RM3.67 million.
In the first quarter of 2019, Yinson reported a 17.5% drop in net profit to RM49.85 million from RM60.43 million in the previous corresponding period, partly due to the completion of contract for FPSO Abigail-Joseph, previously known as FPSO Allan.
“The contract for the asset in Nigeria will replace the earnings for this year,” said Lim.
Meanwhile, Yinson is awaiting the conclusion of the due diligence process by Ezion Holdings Ltd’s debt holders in relation to its proposed acquisition of Ezion for US$916 million (RM3.73 billion) that would allow it to enter the renewable energy plant
KUCHING, July 9 ― Sarawak ICT infrastructure company Sacofa Sdn Bhd signed a memorandum of understanding today with Xperanti IOT (M) Sdn Bhd to explore projects on the internet of things that can be rolled out statewide using the Sigfox network….
KUALA LUMPUR: Malaysia Digital Economy Corporation (MDEC) is establishing an artificial intelligence (AI) unit to support the setting up of the National AI Framework, which is now more than 50% ready.
Chief executive officer Surina Shukri (pix) said the unit would comprise a mix of local and international experts to ensure Malaysia is on the right track to develop an AI ecosystem in the country.
She said the international experts have been identified and are ready to help Malaysia develop the industry.
Citing an example, she said the UK has a similar AI unit with all the related agencies coming together and focusing more on AI.
“We are still in the process of getting feedback. The topic is important and we need to make sure we think of the right aspects,“ she told a press conference on Beyond Paradigm Summit 2019, which is organised by Serba Dinamik Holdings Bhd.
“AI is a new topic for Malaysia. We need to understand and we would share on how to participate for either the industry, government or academia. So we would outline all that,“ she said.
Surina noted that various initiatives and workshops have been done since early this year in setting up the national AI framework, which is slated to be launched at the end of the year.
She said it is important to transform the nation to become an AI hub and lay foundation frameworks and policies related to the main pillar of Industrial Revolution 4.0 (IR 4.0) by continuously engaging and encouraging the private sector and related agencies to play a vital role in this digital transformation.
She expressed hope that the summit, to be held at the Malaysia International Trade and Exhibition Centre on July 17 and 18, would be among the platforms to meet with multiple stakeholders to gather inputs on AI to best serve the businesses, consumers and citizens.
The Malaysian Investment Development Authority (MIDA) is a co-organiser of Beyond Paradigm Summit 2019, while MDEC and Microsoft are the official partners. TM one is the technology partner of the summit.
The summit will also be organised in Kuching, Sarawak, on July 20-21 at Pullman Hotel to showcase the opportunities being offered by the IR 4.0 technologies.
PETALING JAYA: Ekovest Bhd has commenced arbitration proceedings against Samling Resources Sdn Bhd (SRSB) via its wholly owned subsidiary Ekovest Construction Sdn Bhd (ECSB).
In its Bursa filing, Ekovest said the arbitration proceedings relate to the wrongful termination of joint venture and shareholders agreement dated Jan 6, 2017 entered by both parties to undertake the development and upgrading of the Pan Borneo Highway Phase 1 WPC-02 work package contract in Sarawak.
The group claimed that there was a misrepresentation by SRSB in order to induce ECSB into performing SRSB’s task and responsibilities relating to the project before the tender submission and procurement of the project from project delivery partner, Lebuhraya Borneo Utara Sdn Bhd (LBUSB).
Ekovest also alleged that SRSB had failed to make the necessary applications for the approval from the project delivery partner for the sub-contract of the project to its joint venture company, Samling – Ekovest JV Sdn Bhd.
The group added that SRSB failed to take any steps to compel LBUSB to consent to the sub-contract of the works to the JV company, which should not have been unreasonably withheld.”
KUCHING, July 1 — Sarawak is set to export strawberries and other types of vegetables to Japan and some other states in the country following the signing of a collaboration agreement between Borneo Highlands Resort and Natural Green Life Farm. The…
KUALA LUMPUR: Serba Dinamik Holdings Bhd has sealed a collaboration with Perbadanan Kemajuan Negeri Melaka to explore opportunities in Malacca related to oil and gas, engineering and civil works as well as construction and development projects.
The collaborative effort is between Serba Dinamik Sdn Bhd, a wholly-owned subsidiary of Serba Dinamik Bhd and a unit of Perbadanan Kemajuan Negeri Melaka, PKNM Energy Sdn Bhd (PKMNE).
Serba Dinamik group managing director and group chief executive officer Datuk Dr Ir Mohd Karim Abdullah said the collaboration would expand the company’s footprint in Malacca, in addition, to its projects in Johor, Sabah, Sarawak and Terengganu.
“We have two rounds of discussion and we have identified quite a number of projects. (Now) We need to sit down and digest all the information in the first round of discussion and fine-tune technical and commercial aspects as well as in line with their policies as the state government.
“Hopefully, we can roll out something in six months from now, which we are quite optimistic that it can happen because Malacca is a vibrant state,“ he told reporters after the signing a memorandum of understanding with PKNME here today.
Meanwhile, Serba Dinamik has secured six operations and maintenance (O&M) as well as one engineering, procurement, construction and commissioning contracts in Malaysia and Qatar through Serba Dinamik International Ltd and Serba Dinamik Sdn Bhd.
The O&M contracts secured in Qatar has an estimated value of US$60 million (about RM250.62 million), while the contracts bagged in Malaysia has no specific value as they were secured on a “call-out” basis, where work orders will be awarded at the discretion of the clients.
Mohd Karim said the group maintained a target of RM10 billion in terms of the order book in the financial year ending Dec 31, 2019.
To date, Serba Dinamik Holdings’ order book stood at RM8.7 billion.
KULAI, June 24 — Malaysian manufactured chocolates have been well received overseas with the export value showing a rise since 2015. Primary Industries Minister Teresa Kok said the export value rose to RM598.09 million…
PETALING JAYA: KKB Engineering Bhd has secured three contracts worth a total of RM29 million.
In a filing with Bursa Malaysia, the company said its subsidiary OceanMight Sdn Bhd was awarded an engineering, procurement, construction and commissioning (EPCC) contract from MISC Offshore Floating Terminals Dua (L) Limited.
The EPCC contract involves the new ESP module for upgrading and modification on MAMPU-1 and AJK Platform for Vestigo Petroleum Sdn Bhd. The parties are expected to execute a formal agreement in due course.
The other two contracts are a supply order from Mirecont Sdn Bhd and purchase order from SKE Alliance Sdn Bhd for the supply of mild steel cement lining pipes for the Sarawak Water Supply Grid Programme.
The EPCC contract is expected to be completed by December 2019 while the other two contracts will be progressively delivered or collected by March 2020.
The contracts are expected to contribute positively towards the earnings and net assets of the company and group for the duration of the supply period.