KUALA LUMPUR: Sapura Energy Bhd made a RM1.52bil loss in the second quarter (Q2) as the Covid-19 pandemic pushed up the cost on certain projects, forcing the oil and gas company to make hefty provisions for foreseeable losses.

       Project delays in Taiwan and India had also worsened its results.

       Revenue in the three-month ended July 31, 2021 declined 38% to RM747mil mainly due to lower revenue recognition from the engineering and construction (E&C) and operations and maintenance business segments.

       “This is the result of a lower percentage of completion recognised for projects in the current quarter under review, following recognition of foreseeable losses and higher costs for certain projects,” Sapura Energy said in a statement yesterday.

       The group said its results were severely impacted by the pandemic.

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       Group chief executive officer Datuk Mohd Anuar Taib said it is currently negotiating amicable solutions with clients.

       Sapura Energy estimated that cumulated Covid-19 direct costs have escalated to RM397mil as of Q2 financial year (FY) 2022, with RM111mil incurred in the first half of the FY.“The consequential costs arising from these can be between two and four times, depending on the type of project,” Anuar said.

       Sapura Energy expects the current hurdles and uncertainties to continue in the second half of the year.

       Turnaround efforts are also hampered by liquidity concerns, according to Anuar.

       The group, he said, is engaging with parties and lenders on short and long-term portfolio actions to expedite improvements in its cash flow and debt situation.

       “We are reviewing the group’s capital structure and financial framework, as well as the operating model and future business direction,” he added.

       To lead this effort, Sapura Energy has set up a board restructuring taskforce to provide oversight and support to the management team.

       “The board will be working hard with management and key stakeholders especially lenders, to turn around the group as soon as possible,” chairman Tan Sri Shamsul Azhar Abbas said.

       Separately, the company said its indirect subsidiary and E&C joint venture have been awarded contracts with combined values of RM942mil and RM1.7bil, respectively.