Malaysian offshore, marine and drilling contractor posts multimillion-dollar loss for quarter
Cash-strapped Malaysian offshore and marine contractor Sapura Energy is back in the red although the company stressed that recovery is expected from its next accounting quarter.
“This quarter reflects the timing mismatch between cost and revenue recognition, particularly in the E&C segment,” commented group chief executive, Muhammad Zamri Jusoh.
“What’s more important is that the underlying operations continue to deliver progress, and we expect a gradual rebound in the coming quarters.”
Sapura posted a loss after tax and minority interest of 478 million ringgit ($113.77 million) for the three months ended 30 April 2025, which it refers to as the first quarter of 2026.
The contractor’s loss before interest, tax, depreciation and amortisation stood at 275 million ringgit on revenues of 801 million ringgit.
Sapura Energy’s group order book was 7.9 billion ringgit as of the end of April, and its unrestricted cash balance stood at 1.85 billion ringgit.
The quarter’s performance was mainly impacted by what Sapura described as “foreseeable losses” relating to a challenging Engineering & Construction (E&C) project in Angola, along with lower activity levels across other segments.
The company has an approximate $300 million contract with Azule Energy that includes engineering services, transportation, installation and related activities at the Quiluma and Maboqueiro fields offshore Angola. This workscope is scheduled for completion by the fourth quarter.
Sapura’s drilling segment saw lower activity in the quarter, as its rigs were transitioning between projects, while activities in the Operations & Maintenance (O&M) segment were affected by seasonal factors.
Sapura emphasised that it expects its financial performance to improve in the coming quarters, supported by progressive revenue recognition from ongoing E&C projects and the redeployment of drilling rigs under newly secured contracts.
The E&C segment recorded an LBITDA of 296 million ringgit, largely dragged by “foreseeable losses” associated with the challenging project in Angola. The segment’s performance in the current quarter was also impacted by “the natural tapering” of completed projects.
Sapura noted it is executing contracts across Asia Pacific, Africa and the Americas and the company remains focused on selective bidding, risk controls and commercial recovery efforts.
On a brighter note, EBITDA for the O&M segment stood at 24 million ringgit albeit softer compared to one year prior. Nevertheless, the segment sustained a healthy EBITDA margin of 21%, supported by continued cost discipline and the active pursuit of new opportunities in key regional markets, noted Sapura.
The drilling segment posted an EBITDA of 51 million ringgit for the first quarter, which was impacted by lower rig utilisation following recent contract completions.
Several drilling units including Sapura Esperanza, Berani, T-18 and T-17 were in between contracts preparing for redeployment.
“Looking ahead, the segment expects improved earnings following the execution of multiple new contracts from several clients including PTTEP, CABGOC, ExxonMobil and EnQuest,” noted Sapura.
Reset plan
Sapura Energy added that its restructuring efforts remain on track and have entered the final stages.
In May, the company submitted an application in relation to its Proposed Regularisation Plan (PRP) to Bursa Securities Malaysia (the Malaysia Stock Exchange) aimed at facilitating its exit from Practice Note 17 (PN17) status and return to a stronger financial and operational standing. Bursa Securities Malaysia on 30 June approved the PRP, Sapura confirmed on Tuesday.
Key components of the plan include a 99.99% capital reduction to eliminate accumulated losses, and a 20-to-1 share consolidation to enhance share price stability and improve market perception.
The approved PRP includes a comprehensive suite of measures comprising a capital reconstruction, debt restructuring, fund-raising initiative and the necessary regulatory exemptions. The proposed funding is earmarked for the settlement of outstanding payments to vendors in the Malaysian oil and gas ecosystem.
Sapura’s, total borrowings will be reduced from approximately 10.8 billion to 5.6 billion ringgit, significantly lowering interest expenses and easing the company’s financial burden. This will be achieved through a combination of debt-to-equity conversion, settlement shares and the introduction of long-term, sustainable debt instruments.
“With the Restructuring Effective Date targeted for August 2025, or latest by the Longstop Date (11 March 2026), the group is set to conclude one of the most complex restructuring exercises in the country’s history, marking a defining moment that will strengthen its financial position and accelerate its operational turnaround,” the company said on Monday.
Looking to the future
The group is repositioning its E&C segment to align with shifting industry dynamics, which includes optimising the deployment of key assets — such as the vessels Sapura 3500 and Sapura 1200 — to regions with stronger market demand.
In tandem, Sapura’s drilling segment aims to capitalise on its market leadership in tender-assist drilling solutions, by broadening its global reach, with strategic focus on Southeast Asia and Africa.
The group is also pursuing the expansion of its O&M segment beyond Malaysia, actively targeting regional opportunities to strengthen and diversify its order book.
“This is a transitionary phase for Sapura Energy,” added Zamri.
“We are focused on protecting value while positioning ourselves for future resilience. Despite a challenging start to the financial year, we remain committed to restoring stakeholder confidence and delivering sustainable outcomes.”
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