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[KUALA LUMPUR] Malaysia's largest oil and gas services firm, Sapura Energy Bhd, posted a 75 per cent drop in its first-quarter net profit, hit by higher taxes and weaker drilling business as more drilling rigs went off contracts.
Sapura cautioned that the oil price outlook remained uncertain, with low levels of capital spending expected to continue, posing significant challenges to the oilfield services industry.
The company's profit after tax fell to 27.5 million ringgit (S$8.88 million) for the quarter, compared with 110.3 million ringgit in the corresponding period a year earlier.
Profit before tax, however, did not drop as much, sliding 16.2 per cent to 104.4 million ringgit.
Revenue was down 8.9 per cent to 1.77 billion ringgit, hit by slower drilling business as fewer rigs were on contract during the quarter, compared with a year earlier.
Oil prices are less than half of what they were in the middle of 2014, hurt by a supply glut.
Earlier this month, Malaysia's state energy firm Petroliam Nasional Bhd maintained a cautious outlook for the rest of the year, saying supply and demand balances in the market were slow to return to a sustained equilibrium.