Article in The Star "Blip for Sapura Energy", one snippet:
"The stock ..... has been eking out profits in the majority of quarters since the collapse of crude oil prices in late 2014 ......"
Strictly speaking, this is correct, the majority of the quarters were indeed positive.
But ..... overall the company has bled a lot of money over those same quarteres since the losses were much larger than the profits.
The exact amount of the losses over the last 11 quarters is RM 800,000,000.00.
That is a lot of money and that would describe the current situation of Sapura Energy much better than "eking out profits in the majority of quarters". Good journalists should perform this kind of checks to give a more balanced picture.
Other interesting facts that are not revealed in the article are the total amount of liabilities of Sapura Energy (RM 22 Billion) versus only RM 1.9 Billion cash, and the rather high rewards for the controlling shareholder while the company is bleeding money.
Showing posts with label Sapura Energy. Show all posts
Showing posts with label Sapura Energy. Show all posts
Monday, 11 December 2017
Friday, 3 November 2017
Sapura Energy: excessive remuneration for Directors? (3)
Article in The Star: Sapura Energy tumbles on Mokhzani’s exit
One snippet:
Shares of Sapura Energy Bhd tumbled more than 9% in early Thursday trade following report that Tan Sri Mokhzani Mahathir is disposing off his entire stake in oil and gas services company.
This is the second time Mokhzani is offloading its stake in an oil and gas firm. In 2015, Mokhzani’s private vehicle, Khasera Baru Sdn Bhd sold off a block of 190.3 million shares in SapuraKencana Petroleum Bhd for close to RM820mil in total.
Industry players said Mokhzani’s exit did not come as a surprise. They added that Mokhzani believed the oil and gas industry was a global issue and prefers to redeploy his resources in other investments.
Mokhzani through Khasera Baru has a 10.10% stake in Sapura Energy.
According to a term sheet, Mokhzani is looking to sell up to RM905.1mil of Sapura Energy shares.
The bookbuilding range for the offer represents 605 million Sapura Energy shares was between RM1.42 and RM1.49 a share.
The price range represents an 8% to 12.3% discount to Sapura Energy’s closing price of RM1.62 on Wednesday ahead of the bookbuilding launch.
Khasera Baru will not own any Sapura Energy shares after the sale.
"Industry players" said "Mokhzani believed the oil and gas industry was a global issue and prefers to redeploy his resources in other investments".
May be, but could this (yearly renumeration of RM 84M, most likely by the CEO) or this (RM 70M yearly fees, most likely to a company linked to the same person) while the company was losing more than half a billion RM over the last two years have to do with it?
Also taking into consideration that two resolutions were voted against by 18% and 22% of the votes, rather unusual in the Malaysian context.
The sale is suprising given that the share price is roughly at its lowest point of the last five years. Why would anybody want to sell now, especially since it looks like the price of oil has turned and oil inventories are running low?
I guess there is more to the story than "Mokhzani believing the oil and gas industry was a global issue".
One snippet:
Shares of Sapura Energy Bhd tumbled more than 9% in early Thursday trade following report that Tan Sri Mokhzani Mahathir is disposing off his entire stake in oil and gas services company.
This is the second time Mokhzani is offloading its stake in an oil and gas firm. In 2015, Mokhzani’s private vehicle, Khasera Baru Sdn Bhd sold off a block of 190.3 million shares in SapuraKencana Petroleum Bhd for close to RM820mil in total.
Industry players said Mokhzani’s exit did not come as a surprise. They added that Mokhzani believed the oil and gas industry was a global issue and prefers to redeploy his resources in other investments.
Mokhzani through Khasera Baru has a 10.10% stake in Sapura Energy.
According to a term sheet, Mokhzani is looking to sell up to RM905.1mil of Sapura Energy shares.
The bookbuilding range for the offer represents 605 million Sapura Energy shares was between RM1.42 and RM1.49 a share.
The price range represents an 8% to 12.3% discount to Sapura Energy’s closing price of RM1.62 on Wednesday ahead of the bookbuilding launch.
Khasera Baru will not own any Sapura Energy shares after the sale.
"Industry players" said "Mokhzani believed the oil and gas industry was a global issue and prefers to redeploy his resources in other investments".
May be, but could this (yearly renumeration of RM 84M, most likely by the CEO) or this (RM 70M yearly fees, most likely to a company linked to the same person) while the company was losing more than half a billion RM over the last two years have to do with it?
Also taking into consideration that two resolutions were voted against by 18% and 22% of the votes, rather unusual in the Malaysian context.
The sale is suprising given that the share price is roughly at its lowest point of the last five years. Why would anybody want to sell now, especially since it looks like the price of oil has turned and oil inventories are running low?
I guess there is more to the story than "Mokhzani believing the oil and gas industry was a global issue".
Monday, 7 August 2017
Sapura Energy: excessive remuneration for Directors? (2)
I wrote about this issue before, one snippet:
"We notice three government linked funds in the list of substantial shareholders. Will they make noise about the above remuneration? At the last AGM that did not happen, all resolutions were approved by a large majority of the shareholders."
The largest vote against any of the resolutions was only 2%.
The company held its AGM on July 25, 2017, and the results are as follows:
Of interest are resolutions 8 (payments of director fees) and 10 (authorising the directors to issue new shares) which received 18% and 22% of the votes against, a very large change compared to the voting behaviour of a year before.
It is safe to assume that the controlling shareholders voted in favour of the resolutions, meaning that the percentage of votes against from the non-controlling shareholders is even higher.
Are these the signs of some shareholder activism which starts to pop up at Sapura Energy? I most certainly hope so.
The Edge Malaysia (edition August 7, 2017) brought up another issue regarding related party transactions. It wrote an article "A RM70 mil annual poser at Sapura", one snippet:
"It is not clear why the listed company has to pay this fee to its controlling shareholder, which has epresentatives on the board holding executive positions and are paid alaries and director fees."
The amount can be found in the annual report, second part, page 189 (pdf page 139):
Surely the minority shareholders of Sapura Energy deserve a proper explanation on the above transactions.
"We notice three government linked funds in the list of substantial shareholders. Will they make noise about the above remuneration? At the last AGM that did not happen, all resolutions were approved by a large majority of the shareholders."
The largest vote against any of the resolutions was only 2%.
The company held its AGM on July 25, 2017, and the results are as follows:
Of interest are resolutions 8 (payments of director fees) and 10 (authorising the directors to issue new shares) which received 18% and 22% of the votes against, a very large change compared to the voting behaviour of a year before.
It is safe to assume that the controlling shareholders voted in favour of the resolutions, meaning that the percentage of votes against from the non-controlling shareholders is even higher.
Are these the signs of some shareholder activism which starts to pop up at Sapura Energy? I most certainly hope so.
The Edge Malaysia (edition August 7, 2017) brought up another issue regarding related party transactions. It wrote an article "A RM70 mil annual poser at Sapura", one snippet:
"It is not clear why the listed company has to pay this fee to its controlling shareholder, which has epresentatives on the board holding executive positions and are paid alaries and director fees."
The amount can be found in the annual report, second part, page 189 (pdf page 139):
Surely the minority shareholders of Sapura Energy deserve a proper explanation on the above transactions.
Wednesday, 31 May 2017
Sapura Energy: excessive remuneration for Directors?
From the annual report of Sapura Energy:
Those numbers seem very high, especially given the rather poor recent results of the company:
While the company lost a combined amount of RM 585,000,000 over the last two years, the directors earned a combined fee of more than RM 187,000,000 over the same period.
The share price over the last five years:
After reaching almost RM 5, the share price has declined by about 64%, nothing to shout about for the minority shareholders. And dividends have not been much better:
In other words: 37,000 shareholders received less in dividends than the Directors in remuneration. It seems the company is more interested in rewarding the Board of Directors than the shareholders.
If we look in more detail we notice the following:
Most of the remuneration for the directors is earned by a single person (I assume Sharil, the president and group CEO, although unfortunately the director is not named), and mostly based on performance.
But with the company losing more than half a billion over the last two years, the share price down a lot and the dividend cut, one wonders what the KPIs for that performance are.
The fees for the non-executive directors are also on the high side:
The major shareholders of the company:
We notice three government linked funds in the list of substantial shareholders. Will they make noise about the above remuneration? At the last AGM that did not happen, all resolutions were approved by a large majority of the shareholders.
Let's wait and see if the next AGM to be held in July will be any different.
Those numbers seem very high, especially given the rather poor recent results of the company:
While the company lost a combined amount of RM 585,000,000 over the last two years, the directors earned a combined fee of more than RM 187,000,000 over the same period.
The share price over the last five years:
After reaching almost RM 5, the share price has declined by about 64%, nothing to shout about for the minority shareholders. And dividends have not been much better:
In other words: 37,000 shareholders received less in dividends than the Directors in remuneration. It seems the company is more interested in rewarding the Board of Directors than the shareholders.
If we look in more detail we notice the following:
Most of the remuneration for the directors is earned by a single person (I assume Sharil, the president and group CEO, although unfortunately the director is not named), and mostly based on performance.
But with the company losing more than half a billion over the last two years, the share price down a lot and the dividend cut, one wonders what the KPIs for that performance are.
The fees for the non-executive directors are also on the high side:
The major shareholders of the company:
We notice three government linked funds in the list of substantial shareholders. Will they make noise about the above remuneration? At the last AGM that did not happen, all resolutions were approved by a large majority of the shareholders.
Let's wait and see if the next AGM to be held in July will be any different.
Subscribe to:
Posts (Atom)