Malaysia’s SapuraKencana Petroleum has seen its profits slashed almost 77% in the second quarter ended July 31, 2015, on high impairments, despite a 4% revenue growth.
The company generated revenue of approximately $651.5 million, or 2.8 billion ringgit, up from $627 million, or 2.69 billion ringgit from the year-ago quarter.
Net profit for the quarter was at 104 million ringgit or $24.2 million, a drop from 446 million ringgit or $103.8 million in the prior-year quarter.
The drop in profit was primarily attributable to provision for impairment on oil and gas properties in the current quarter of about $125.6 million (540 million ringgit). Nevertheless, excluding the impairments, SapuraKencana’s profit before tax was some 14% higher compared to the corresponding quarter of the preceding year .
For the first six months, revenue was slightly down, however the impairments, booked in the second quarter, have cut the cumulative profit by some 62% from 956 million ringgit ($222.4 million) down to 365 million ringgit ($85 million).
“The global oil and gas industry continues to face low crude oil prices. The resultant reduction in and postponement of offshore development projects is expected. The Board anticipates the challenging environment to persist over the medium term,” the company said in its Q1 report.
The company has not provided any revenue or profit estimate, forecast, projection or internal targets.