KUALA LUMPUR: Integrated oil and gas services company Sapura Energy Bhd, which clinched a RM3 billion deal from India's Oil and Natural Gas Corp last week, is poised for a turnaround to improve on its financial health and solidify earnings growth.
Market analysts said Sapura Energy to date has successfully secured a total of RM8.5 billion worth of contracts, pushing its orderbook to RM18.6 billion which will keep the company busy over the next three years.
"Sapura Energy contract wins, couple with strategies put in place by the management, will push the company to be one of the world's top five oil and gas service providers," the analyst said.
Public Investment said the Group’s tender book remains strong, growing from US$2.5 billon in 2017 to US$9.8 billion at present, with additional prospects of US$14.3 billion for next year.
"Furthermore, the Group’s recent entry to into Saudi Aramco’s long-term agreement programme will attract investments worth US$150 billion, of which Sapura Energy will have a slice of the pie," said Public Invest.
JF Apex Securities analyst Lee Cherng Wee expect Sapura Energy's earnings to improve, given the gradual pickup in global capital expenditure spending, as the O&G player bids for US$8.8 billion worth of jobs this year compared to US$2.5 billion in 2017.
JF Apex gave the stock a "Buy" recommendation.
Meanwhile, an industry observer said the Sapura Energy's president and chief executive officer Tan Sri Shahril Shamsuddin who has over 20 years experience, has put in strategies that would turn around back onto the growth trajectory.
At a time when other oil and gas companies are struggling to remain afloat, Sapura Energy on the other hand is closing business deals, said the observer.