KOTA KINABALU: SMJ Energy Sdn Bhd (SMJE) posted a net profit of RM259 million for the year ended Dec 31, 2023, compared with a net loss of RM7 million in the previous year.
This remarkable performance was primarily driven by substantial dividends from its wholly owned subsidiary, Sabah International Petroleum Sdn Bhd (SIP), predominantly from its 10 per cent interest in a lucrative Petronas LNG9 (PLNG9) investment.
The LNG9 investment was transferred to SMJE in February 2024.
Additional contributions include share of profits from SMJE's 25 per cent interest in the Samur petrochemical plant and crude oil sales from its 50 per cent interest in the Samarang Production Sharing Contract (PSC).
As a group following the acquisition of SIP, SMJE made a consolidated net profit of RM100 million ex the effect of intragroup dividends.
For the fiscal year 2023, the SMJE group of companies achieved gross revenue of RM944 million, mainly attributed to Oil and Gas sales from Samarang PSC.
The group concluded the year with a positive cash balance of RM250 million and total gross assets of RM5.1 billion.
"We are proud to have a lineup of very reputable and respected professionals serving the SMJE board and management team, ensuring robust corporate governance and a strategic growth plan
focused on profitability", Sabah Finance minister and SMJE Chairman Datuk Seri Masidi Manjun said in a statement.
He said the company's prudent financial management is evident in its paid-up share capital of RM50 million by mid-2023 and the declaration of its inaugural dividend of RM50 million to the Sabah State.
SMJE also contributed RM36 million in Sabah sales tax to the Sabah Ministry of Finance coffer in 2023.
Masidi said that SMJE's acquisition of SIP in 2023 has proven to be highly profitable and value-accretive due to the strong dividend flow from LNG9 for the next 13 years.
Restructuring SIP's substantial legacy debts through sukuk refinancing at a significantly lower interest rate has dramatically reduced borrowing costs, achieving over RM60 million in interest savings in 2023 alone.
SIP will now refocus on its core business of floating production storage and loading services.
"The settlement of SIP legacy loans with Sabah Development Bank also enables the bank to manage its high-cost bond repayment obligations better and redeploy financial resources to support other development projects in Sabah."