The world’s oil and gas industry is known to be an intensely competitive industry with all the oil majors and their sub-contractors vying for the piece of the pie.
BUT Sapura Energy Berhad on the other hand is in a class of its own as it continues to demonstrate its winning ways by clinching jobs one after another against a backdrop of challenging crude oil prices.
Sapura strengthened its grip on the global oil and gas market by clinching five new deals last week worth a combined RM1.3 billion further bolstering its total order book to RM18.2 billion which is enough to keep it busy for the next three years.
Kenanga Research analyst Steven Chan said the latest deals highlight the company’s competitiveness and
extraordinary ability to win contracts as well as to execute the job both domestically and internationally.
“Its maiden entry into Egypt as well as its first contract with the Royal Australian Navy underlines the company’s technological and engineering competencies,” said Chan.
An investment analyst at Permodalan Nasional Berhad meanwhile said the Sapura’s ability to bag the deal is without a doubt due to the vast experiece and stellar leadership of its president and chief executive officer Tan Sri Shahril Shamsuddin who was able to buck the trend by bagging the deals.
“Not many people were confident that Sapura could turnaround due to the weak crude oil prices but Shahril has proved otherwise and there is no way for Sapura to go but up,” said the analyst.
Sapura bagged a total of five contracts last week worth a combined RM1.3 billion which are a contracts from Phoenix International Austarlia Pte Ltd for the Royal Australian Navy, Egypt’s Pan Marine Petroleum Services, Indonesia’s ENI East Sepinggan Ltd and in Malaysia they were ExxonMobil Exploration and Malaysia Production Inc as well as Petronas Carigali.
All in all, it was a positive development for Sapura with all the analysts in their respective research notes to investors projecting a positive outlook for the oil and gas giant.
Maybank Investment Bank analyst Liaw Thong Jun said with the latest deals, Sapura is well on its way to secure more new orders in 2020 on the back of rising capital expenditure and distribution of tenders by oil and gas majors and worldwide.
Alliance Investment Bank research team said the worst is over for Sapura underpinned by its cleaned up balance sheet, net gearing of 0.6 times and also forecast that tenders and orders have picked up and Sapura is expected to turnaround as early as the second half of 2020.
Public Investment Bank analyst Nurzulaikha Azali said more contracts is set to come for Sapura on the back of several active bids totalling RM45 billion.
“The latest win marks the first set of contracts wins for Sapura in 2020 with more expected to come in the next few months,” Nurzulaikha said in a research note to investors recently.
Hong Leong Investment Bank analyst Sean Lim Ooi Leong said Sapura is now on track to record better results for every coming quarters and a full turnaround is expected for the firm by the second half of 2020 in tandem with the world’s improving oil and gas sector.
Collectively, all the research houses which are Alliance Investment Bank, AmInvestment Bank, Hong Leong Bank, Maybank Investment have given the Sapura stock a buy or outperform recomendation targeting its share price to climb between 42 sen and 55 sen in the next 12 months from its current share price which is hovering at the 35 sen a piece level.
It is clear that with all these contracts in hand, there is no stopping Sapura from further spreading its wings to all parts of the world.
Sapura, which has a presence in more than 20 countries employing more than 10,000 workers spanning over 35 nationalities is not showing any signs of slowing down and continues to stamp a mark in the world standing a class above from other oil and gas players. Sapura is indeed in a class of its own