MENU

An Investor’s Fact Sheet For A Malaysian Oil & Gas Company, SapuraKencana Petroleum

One of the most badly hit industries over the past few years is oil and gas.

This is due to the halving of the price of oil from around US$100 per barrel in mid-2014 to less than US$50 today. A large decline in the profitability of the companies in the oil & gas industry happened as a result.

In Singapore’s stock market, major oil & gas players such as Sembcorp Marine Ltd (SGX: S51) and Keppel Corporation Limited (SGX: BN4) are facing significant headwinds.

There are also many companies in Bursa Malaysia, the stock exchange of Malaysia, that are exposed to the oil & gas industry – one of the largest in the space would be SapuraKencana Petroleum Bhd (KLSE: 5218.KL).

Here is a fact-sheet for SapuraKencana so that investors can have a better sense of what the company is all about.

The business of SapuraKencana

The company is an integrated services provider that covers the whole oil and gas value chain. In other words, SapuraKencana provides services such as drilling, exploration, production, and the decommissioning of oil & gas assets.

The company also operates across the globe (it is in Asia, Australia, Europe, America, and Africa) and is one of the largest oil and gas services providers around.

Here’s a chart showing SapuraKencana’s key revenue contributors:

SapuraKencana segmental revenue chart - Lawrence
Source: SapuraKencana FY2016 annual report

From the above, we can see that Engineering & Construction activities take up the lion’s share of SapuraKencana’s total revenue. The main activities of this segment include: 1) Installation of offshore platforms, pipelines, and subsea services; 2) engineering, procurement, construction, and commissioning services; and 3) repair and refurbishment of various assets

For the drilling segment, the company is the “world’s leading tender rig owner and operator with approximately 50% share of the global market.”

In the energy segment, the company is involved with the exploration and production (E&P) of oil and gas. Using its own expertise as a services provider, the company aims to become an independent regional E&P player.

SapuraKencana’s financials

No introduction of a company is complete without some financial numbers. So, let’s look at some key financial numbers for SapuraKencana below:

SapuraKencana financial numbers chart - Lawrence
Source: SapuraKencana FY2016 annual report

You can see that the company’s revenue and operating profit have both increased over the last few years. But there’s one point to note here: The operating profit numbers exclude (1) impairments made in FY2016 (fiscal year ended 31 January 2016) and FY2015, and (2) a one-off item in FY2016. If the impairment was included, Sapura Kencana had actually made a small loss in FY2016.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.