Pls don follow IB TP. They have their favor stock. They will write what they want. Just extract the info from analyst btiefing will do. MIB always revised TP when thing materialized for BAB. Previously all IB also treat BAB like this bcos BAB always disappointing the analysts. But now left MIB i guess bcos their top stock under fpso or o&g is yinson. They have no choice.

STOCK IMPACT  1Q23 EBITDA improved 4% yoy to RM341m (flattish qoq). This contained earnings from its sole remaining and its flagship OSV, the Armada Tuah 3000 (AT300). AT300 was still generating earnings for Bumi Armada (BAB) until 2Q23, under its 10-year charter with Shell, and the contract expiry as well as the handover of the OSV to Shell was done in 2 May 23. The AT300 and the FPSO Armada Claire (disposed of in Apr 23 for US$20m) are classified under asset held for sale in 1Q23 amounting to RM88m. The FPSO Claire’s sale will see a US$12m disposal gain in BAB’s 2Q23 results. Despite lower qoq revenue, we believe BAB was able to gain cost savings as commodity prices normalised during the quarter.  Net debt/EBITDA continued to decline to 3x. Its net gearing is the lowest since 2015, after repaying US$110m of loans in 1Q23 and bringing down loan base to RM5b. BAB said it has submitted bids for projects, but made no mention on the size nor the number of projects it is pursuing. Previously, it guided that it can take on 1-2 FPSO projects on its own, and another 1-2 more projects shared with its partner SP Energy on the JV level. We believe that in line with its newly focused sustainability goals, it is likely that BAB is more focused on pursuing floating gas type of projects, vs FPSOs.  On 2 May 23, TotalEnergies announced a head of agreement for Cameia. The head of agreement was signed with its partner and the Angola regulator, Agencia Nacional de Petroleo Gas (ANPG), the party that is responsible to study and approve the field development plan for the oil project, or the final investment decision (FID). ANPG said this agreement “acts as an important milestone for the sanctioning, and allows the first production of Cameia-Golfinho fields”, located on Blocks 20 and 21 of Kwanza Basin. And, it detailed the need for an FPSO, the 7th for TotalEnergies in Angola. ANPG’s final statement is “will await the next phases for the concretisation of results”.  In our view, it is difficult to determine if this development is as good as a FID. But, it is possible that it a) signals that TotalEnergies want to keep to its original project timeline and hence is trying to hasten the process to secure FID, b) a new agreement is needed to help incorporate green capex into the oil project and the FPSO plans, or c) a simpler process towards FID before ANPG becomes busy in 2H23 working on other matters (managing new Angola onshore concessions). Having said, it is unclear if BAB remains as the preferred FPSO contractor.  JV FPSO Armada Sterling V now expected for first oil by Jun 23, by the client national oil major of India Oil and Natural Gas Corp (ONGC). The FPSO is a 70:30 JV project of Sharpooji: BAB, under a US$2b nine-year firm charter (seven years of extension). The bond ratings agency CareEdge stated that the daily bareboat charter rate is US$609,200, and capex is US$1.17b (above original US$1b estimate). The FPSO has met its latest mobilisation date of Dec 22, but is not yet known to us if the FPSO will earn some layup rate in 2Q23. Conservatively, we assume no earnings until first oil. EARNINGS REVISION/RISK  Retain earnings forecasts. We may fine-tune our JV forecasts once FPSO Armada Sterling V achieves first oil. Our 2025 yoy earnings decline conservatively assumes that we do not factor another major FPSO win, and that FPSO TGT1 and FPSO Kraken may not be renewed after their firm expiries in end-2024/2H25 respectively. VALUATION/RECOMMENDATION  Retain BUY with target price of RM0.75 (implied 5x 2023F PE), which also inputs JV FPSO DCF at RM0.07/share. BAB still remains as a discount to Yinson’s 15x PE valuation, but the target prices are consistently within 5-7x EV/EBITDA. While Yinson holds many growth projects to justify a higher 7x EV/EBITDA, BAB’s re-rating will depend on its ability to materialize future contract replenishment catalyst.

RESULTS  1Q23 core profit of RM209m is in line, at 26% of expectation. Note that our forecasts have yet to fully input the contribution from FPSO Armada Sterling V, which is on standby for first oil. On its existing projects, the FPSO income declined qoq as FPSO Kraken was undergoing various extensive remedial work on all four engines, while also improving its safety systems to meet the regulator’s standard (31 May 23 deadline).  Asset-light segment appears to be back to normalised run-rate, with 1Q23 profits of RM3m/RM1.5m respectively on the operating level and the JV project level (likely due to various modification works for Karapan Armada Sterling III). While there is no disclosure on the mix of works done for existing assets vs pre-engineering works for potential projects, we note that 1Q23 profit level is fairly consistent with 2021’s base of RM5m/RM13m on the operating and JV level respectively.

Affin

Incoming FPSO to drive stronger 2H23 profit ➢ Bumi Armada’s 1Q23 core net profit of RM206m (+16% yoy) in line with our and consensus expectations, accounting for 24–25% of respective forecasts ➢ The new ONGC’s Sterling V is expected to lift 2H23 profit. Caspian Sea job prospects continue to look promising for both its subsea construction vessels ➢ Reaffirm BUY with a higher DCF-based 12-month target price of RM0.85 Solid quarter BAB continued to sustain its average RM210m quarterly profit run rate without any surprise. 1Q23 core net profit grew 16% yoy to RM206m driven by stronger JV profit and higher FPSO vessel uptime, which also resulted in a 1ppt EBITDA margin improvement. All FPSOs are running close to the optimum 100% uptime, with FPSO Kraken operating at c.94% efficiency, a slight improvement from last year. Net gearing was reduced from 0.9x to 0.8x qoq in 1Q23, a demonstration of its strong cash flow generation. We expect earnings to step up in 2H23 once the new FPSO Sterling V commences its 10-year firm charter with ONGC. We gather that job prospects in the Caspian Sea remain rosy whereby both its subsea construction vessels are in the midst of tendering for work, and if materializes will further lift our existing forecasts. Further strengthening its balance sheet for new opportunities ahead Two asset disposals are expected to take place in 2Q23: the last OSV in its fleet and FPSO Claire. BAB is expected to book a US$12m gain on disposal for FPSO Claire in the upcoming quarter. The expected US$20m proceeds have been earmarked to repay debt which stands at RM5bn at end 1Q23. By reducing the current net gearing level, this will allow BAB more balance sheet flexibility to explore new growth projects. The robust FPSO market presents good opportunities to secure more FPSO projects. Elsewhere, BAB is also exploring more gas infrastructure asset opportunities and carbon capture injection and storage projects as part of its sustainability strategies. Raise TP to RM0.85; maintain BUY We roll forward our valuation and raise our DCF-based target price to RM0.85 (from RM0.80), which implies an attractive 6x forward PE. The maiden Sterling V contribution, potential new FPSO and subsea construction vessels contract wins are amongst the catalysts remaining in 2023E. Maintain BUY. Downside risks include unforeseen FPSO termination or operation disruptions.

From RHB:
BAB is in talks with the client over the potential standby rate payment. Could be link to 98/2

ONGC will be BAB close partner going forward. Do not think they want to frustrate them. Im fine with this is as long as the issue will be resolved

Kakinada 98/2 •FPSO Sterling V successfully hooked up with the STP buoy mooring system since endDec 2022, and is now ready to commence commissioning upon provision of first oil by ONGC.

From analyst presentation slide

Cimb and mib always lagging. They favor yinson. So...

https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:49070160-7e7a-355c-be2e-7371bd1a3e59

2nd part of cimb report

We raise our target price from 69 sen to 87 sen for two reasons. 1. We reduce our cost of equity assumption from 16% (using beta of 2) to 13% (using beta of 1.5), as we believe the risks surrounding BAB now are much lower than in previous years due to several years of stability in the operations of FPSO Kraken and FPSO Olombendo. 2. We also incorporate an 11 sen uplift to our SOP by assuming that BAB will win one EPCIC contract at an assumed capex of US$1.5bn FPSO project at a 10% margin. BAB has been identified by industry newspaper Upstream as the most likely candidate to win TotalEnergies’ Cameia FPSO project to develop the Cameia and Golfinho discoveries offshore Angola. As this is a purely EPCIC project, the risk of a rights issue is low, in our view. Potential re-rating catalysts include continued strong results from the FPSO segment, improving activities in the oil and gas industry as a result of high oil prices, and the improved prospects for BAB to secure longer-term and more substantial work for its two Caspian Sea pipelay vessels. Also, we expect TotalEnergies to award the commercial deal for the FPSO Cameia sometime this year. Meanwhile, BAB may be bidding for additional FPSO projects. We believe that BAB will avoid a rights issue for any future FPSO project wins, as BAB may opt for JV partnerships for new FPSO projects that may make a rights issue unnecessary or rely on upfront supplier funding that can be material. Also, BAB had said it is not interested in taking on project work for more than two large FPSOs at the same time, in order to better manage resource availability.

I feel very comfortable with the current management.

Cimb

Good set of 1Q23 results when excluding taxes 1Q23 core net profit of RM198m was 13% lower qoq mainly due to the absence of a tax writeback that was seen in 4Q22; without this item, 1Q23 core net profit would have declined only 5% qoq. This residual decline was caused by lower FPSO Kraken uptime vs. 4Q22, and lower variation order revenues for the FPSO Olombendo. Furthermore, BAB had completed its Caspian Sea subsea construction jobs in 4Q22. These factors were partly mitigated by higher engineering services revenues, as BAB performed more of such services for its associate company in India. Against 1Q22, 1Q23 core net profit was 9% higher yoy because of higher Kraken uptime. BAB ready to take on new contracts; an award may be near Looking forward into 2Q23F, BAB will complete the sale of the laid-up FPSO Armada Claire for US$20m, and also complete the sale of its final remaining OSV; we forecast exceptional disposal gains of c.RM50m. More importantly, BAB is looking forward to the project award by TotalEnergies of an FPSO earmarked for the development of the Cameia and Golfinho discoveries offshore Angola. According to a Mar 2023 report by industry newspaper Upstream, BAB had already reserved a slot with an offshore yard in Singapore, due to the tight availability of yard space, to prepare for the potential award of the Cameia FPSO job. BAB also confirmed at its analyst briefing this afternoon that it had tendered for various other FPSO jobs, although it is careful not to take more than two large jobs simultaneously in order to not overstretch its resources. After three years of stable operations by BAB’s Kraken and Olombendo FPSO assets, BAB has successfully degeared itself, with the 1Q23 net gearing at only 0.82x vs. 1Q20’s 2.95x. BAB believes, and we concur, that it is ready for growth, and ready for new project intake. Target price uplift from assumed EPCIC award, plus lower Ke We incorporate an 11 sen uplift to our SOP valuation by assuming that BAB will win the TotalEnergies’ FPSO Cameia EPCIC project at an assumed capex of US$1.5bn and 10% margin. As this is a purely EPCIC project, the risk of a rights issue is low, in our view. We also reduce our cost of equity assumption from 16% (using beta of 2) to 13% (using beta of 1.5), as the risks surrounding BAB are much lower than in previous years. If BAB wins this award, we expect its share price to re-rate. BAB is also bidding for more Caspian Sea subsea construction work this year. Downside risks include an unexpected and material decline in oil prices that may cause a pause in the pace of upstream FPSO capex spending by the oil majors and national oil companies, impacting BAB’s future growth potential.

Thanks Nic.

The project finance loan for Armada Kraken was fully repaid in March 2023, over three months ahead of schedule

Yinson. Too big to fail. One project hitcup will stretch their balance sheet. Thats why you cant give high valuation for yinson. To be fair. They run all projects concurrently not progressively.

Net debt 4.3B

Backend will benefit. U are talking about front end

Finding sustainability in plastic packaging Plastic is widely used in many industries, especially consumer products. The regula-tions regarding the sustainability of plastic packaging are evolving and more companies are increasingly working towards environ-mentally friendly solutions.
"Sustainability has been a big topic since last year and that has transformed the in-dustry. Previously, recyclable plastic content was sold at a cheaper price, but now the trend has reversed. Plastic packaging with recycled content is selling at a higher price because of the shortage of recycled materials," Ang says. He points out that 100% of Thong Guan's products are recyclable.
Ang stresses that plastic is one of the most sustainable materials as its lighter weight re-duces its environmental footprint.
"One of the main issues with the usage of plastic is waste management, because it's light-er than water. As such, we have been working with our customers to collect all used plastic packaging since last year and recycle it our-

BY INTAN FARHANA ZAINUL
ow-profile plastic packaging company Thong Guan Industries Bhd has seen stellar growth in its top and bottom line over the last five years, on the back of increasing demand for pre-mium stretch film in Europe.
The group charted a compound annual growth rate (CAGR) of almost 10% in revenue and 18% in net profit from 2018 to 2022.
Unfazed by an expected slowdown in the economy this year,Thong Guan executive direc-tor Alvin Ang See Ming is confident the group can achieve at least 10% revenue growth as it continues to expand its production capacity amid more stable raw materials prices.
"I think we can achieve it. Last year, the second half of the year was not good for us. For this year, hopefully, it can pick up again. We have seen some pickup in demand in recent months with China reopening and raw material prices stabilising," he tells The Edge in an interview.
He acknowledges that there is a risk of an economic slowdown this year, but says that demand for plastic packaging is nevertheless expected to remain robust. The group will continue its focus on expanding into the European and US markets, which have been driving its growth over the past six years.
"The market in Europe and the US is very big for premium packaging. We don't fore-see any obstacles for us to continue to grow in the next five to 10 years especially in the stretch film segment," he says.

From the edge

Receivable means job delivred pendin payment

Vessel* sorry nik

Size of osv has been reduced and small. Hence this segment may not be run in very effective manner. The yard has been in poor condition.

Just sizeable enough to move in cleaner energy industry. Well done for armada. Do not carry too many babies. Easier to navigate tru the energy transition.

Got chance?

https://www.offshore-energy.biz/totalenergies-cheers-important-milestone-towards-sanctioning-oil-project-off-angola/

AR2022. Foreign shareholdings now at 22%+ (31/3/23) up from 12% (31/3/22)

Many dislike armada but their esg rating is good

MIB esg rating for armada is good at 20.4 improved from 33
Yinson 17.4 improved from 21.7
Dialog 26.4 improved 31.6

Armada is the 2nd best only after yinson

Thats why FF buying

I believe the new fspo must be electric support and carbon capture so it will take more time to finalize the deal to meet the requirement. Be selective is good just be patient

Niki. Why armada want to rush for contact especially fpso. Slow is good for this transition period. May secured many projects like yinson and back by billions of debts. All these projects required strong cash flow from their charters. Oil is not gold capitalixe the trend good for long term. Fpso is long term contract. Its better to prudent now than later. Yinson majority fpso orders. Good or bad if up to investor but to me is rather risky. Looking at their interest p.a. this is the 1st time armada officially shared their green stratergy

OUTLOOK FOR 2023 Notwithstanding the current uncertain times for the global economy, health and safety remain a key focus area for us. We will continue to drive the performance of our existing fleet whilst progressing ongoing projects. Moving forward, our sustainability strategies, which include gas as a transitional energy source, will drive new infrastructure projects. We will also evaluate carbon capture injection and storage projects. This will accelerate our transition towards Net Zero carbon emission by 2050. Whilst ongoing debt reduction and the strengthening of our balance sheet enable us to explore new projects, we will continue to be financially disciplined and will only pursue opportunities which are mutually beneficial to us and our clients.

From Chairman in AR 2022

No report uploaded in CIMB or UOB platform

From AR 2022

https://www.upstreamonline.com/rigs-and-vessels/analyst-predicts-bumper-year-for-fpso-awards-for-2023/2-1-1421765

I remember management of armada did mention they are exploring this biz opportunity

https://www.iea.org/fuels-and-technologies/carbon-capture-utilisation-and-storage#:~:text=Carbon%20capture%2C%20utilisation%20and%20storage%20(CCUS)%20refers%20to%20a,global%20energy%20and%20climate%20goals.&text=CCUS%20involves%20the%20capture%20of,fuels%20or%20biomass%20as%20fuel.

https://oilnow.gy/featured/more-fpsos-may-be-needed-as-guyanas-stabroek-block-discoveries-grow-hess-boss/

https://splash247.com/bw-offshore-offloads-fpso-for-125m/

Usd 1B for this project

Armada has succesfully transformed. They not only selective in their projects. You have to taking care of the prospect of ESG and boom in EV. Growing to fast in FPSO is not a good thing. Oil demand in developed countries is driving the oil price over the last decades. Price is sensitive to demand. It will world another way round. Carry too many fpso projects may not neccessary is a good thing.

Outlook. Post the ice-class vessel disposal, we have been guided that the OMS unit now has three OSVs, two sub-sea construction vessels, and one JV sub-sea construction vessel. While BAB has secured new jobs worth USD50m for the construction vessels from Lukoil, we do not discount the possibility of works being interrupted due to relevant sanctions being imposed, as a result of Russia’s invasion of Ukraine. Meanwhile, following the repayment in January, its remaining balance of Tranche 1 Term Loan Facilities is USD27m, with scheduled amortisation and final maturity in Nov 2022. Overall, operating cash flow in FY21 improved 50%, with better working capital management. Net gearing also dipped to 1.55x in 4Q21 (3Q21: 1.71x). BAB is looking to monetise Armada Claire this year, and is bidding for new FPSO jobs. It was reported by Upstream that it has submitted a tender to compete for TotalEnergies’ Cameia FPSO project in Angola. India’s Oil and Natural Gas (ONGC) KG-DWN 98/2 FPSO construction is 80% completed, and BAB aims to complete it by 2H22. 

Keep BUY. We maintain our earnings estimates but raise our TP to MYR0.65 from MYR0.62 post net debt update for FY21. Our TP also incorporates a 2% ESG discount, based on a scoring of 2.9. Our TP implies FY22F P/E and P/BV of 6.4x (below its 5-year mean of 7.2x) and 0.84x (slightly below +2SD from its 5-year mean at 0.9x). Downside risks: Contract cancellations, weaker OSV utilisation rates, and a deterioration in Armada Kraken’s operations.

RHB

https://www.upstreamonline.com/people/srinivasan-sees-a-future-for-floaters-in-the-transition-to-clean-energy/2-1-1171658

Not material...so why are we bother

From RHB:-

Good year for downstream. Management indicated that the downstream segment’s performance has improved with very positive margins in FY21, on the back of higher prices as well as trading profits made during the year. However, its utilisation rate dropped to 80% from 90% in 2020, as focus was tilted more towards the upstream side – given SOP’s sensitivity to CPO prices.

FY21 unit cost was at MYR1,600/tonne, which was flattish YoY. This was likely due to lower fertiliser application and higher PK credits. Due to the labour shortage, management only applied 75% of its fertiliser requirements for FY21. Management anticipates that unit costs will be flattish YoY in FY22 despite rising fertiliser costs, as it is able to utilise some of the carriedforward FY21 fertilisers this year. SOP has contracted fertiliser prices for its 1H requirements, at 40-50% higher. We are more conservative, and have imputed a 10-15% YoY increase in unit costs in FY22.

Good stratergy from SOP

Wow...malaysia (will benefit from oil and palm oil) and australia

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Wow...malaysia (will benefit from oil and palm oil) and australia