Petron do not have any refinery margin derivatives, they only hedge against currency exchange and commodity, and the contract size is small, they should enjoy the full benefit of increase crack spread. While HY on the other hand, has done quote alot of hedging, it will capped their profit, its good when crack spread is low, but at the current environment, i see Petron profit will outperform HY.

@pang72 where did you saw crack at 37usd?

probability is right, re-quote from my previous comment:
"based on latest QR, there have 280mil refining margin swap, my guess is the 280mil will offset most of the margin gain in Q1, and assume they are doing minimal hedging in Q2 (i doubt they will not be dump to hedge when margin is all time high), we will be seeing extraordinary earnings in Q2."

https://www.hellenicshippingnews.com/refinery-margin-tracker-record-high-global-diesel-cracks-propel-margins-upward/

"A refining golden age", quoted from the news above

Quoting from the news below: MRPL, the largest oil refinery company in India, said that 1 USD increase in GRM (Gross refinery margin) is equivalent to 25% increase in EDITDA, wonder if HY enjoys similar margin as well?

https://www.moneycontrol.com/news/business/markets/mrpl-to-capitalise-on-strengthened-singapore-grms-md-m-venkatesh-8383251.html/amp

Another piece of information to shar, contribution from @beruang
https://klse.i3investor.com/web/blog/detail/stockideas/2022-05-08-story-h1622495595-HENGYUAN_PETRONM_a_new_golden_age_of_oil_refiners

Sharing another article about the current high gross refinery margin India refinery company is enjoying, and I quote: “to them, 1usd increase in GRM will result in 25% increase in EBITDA”, this is not HY but we can get a feel of how beneficial is the current refinery margin to HY
https://www.moneycontrol.com/news/business/markets/mrpl-to-capitalise-on-strengthened-singapore-grms-md-m-venkatesh-8383251.html/amp

@cactus81 it is significant increase, no doubt

@valueguru you did bring up a good point about HY's hedging, based on latest QR, there have 280mil refining margin swap, my guess is the 280mil will offset most of the margin gain in Q1, and assume they are doing minimal hedging in Q2 (i doubt they will not be dump to hedge when margin is all time high), we will be seeing extraordinary earnings in Q2.

Davidtslim wrote some very detail articles on HY business back then in 2017, very good for educational purpose, I post the link here for those who are interested

https://klse.i3investor.com/web/blog/index/davidtslim

@probability thanks for the information.

I think people are confused in regards to HY benefits from high oil price, they don’t. They benefits from high crack spread, higher oil price means higher cost to them, although they will also record inventory gains in accounting terms.
I will not buy HY even oil price reaches 150usd if the crack spread is not good. But now the crack spread is historical high now, too attractive for me to ignore. The spread between oil and Diesel futures are also all time high, and diesel product is their highest revenue contributor. I can imagine HY will have very very nice profit in Q2.

@probability may know where you get this detail?

"by 22 Dec 2021 Hengyuan no longer forced to buy Brent from Shell, the 5 year contract is over and they are free to buy Russian oil..."

I agree, wait for Q1 report out will be too late, price would usually shoot up before report thanks to insider trading. It’s the risk I have to consider, anyway no investment is risk free, high risk high return. Q1 report should not be bad, just might not be as good as ppl expect. Hope I’m wrong, I have stake in it too

Based on 2021 Q4 report page 13, HY has 280mil worth of refining margin swap contracts and liability of 187 mil out of the contract, the liability is due to the increase in crack spread and it cancelled off the gain from crack spread increase. With this much amount of hedging, I don't see how they will benefit from the crack spread, any increase in the refinery margin will just offset by the swap contract, unless the crack spread increase significantly. I also read in the 2021 annual report page 113, as per their hedging position in 2021, every 10% increase in refining margin will only increase profit after tax by 5mil, due to the swap contract.

I'm holding some position in HY and thinking to topup more, but after this finding I'm thinking twice before I act. Appreciate if anyone can confirm my writings above.

https://www.upstreamonline.com/exclusive/ongc-recovers-offshore-jacket-left-stranded-at-vietnam-yard-by-sapura-cash-woes/2-1-1181438.

be mindful on the negativity impact Sapura might have on Armada, there's a big piece of OGNC 98/2 FPSO construction work awarded to Sapura, in event Sapura failed to deliver, we might see another force majeure event.

@MoneyMakers, your calculation is inaccurate, not all their borrowings are floating rate, and Armada used interest rate swap to hedge their risk in interest rate. According to 2020 annual report, almost half of their floating rate loan are hedged with interest rate swap, every 0.5% increase in interest rate will reduce PBT by 18mil p.a, and that is 2020, i would presume the PBT reduction figure would be much lower in 2022.

i have some serious concern on 98/2 ONGC FPSO project, I'm worried that it not be able to complete this year due to the financial issue Sapura Energy facing, the news of which Sapura subsidiary is winding up or not able to make payment is everywhere for the past 2 months. One of the major reason the FPSO got delay is because of the slow progress in "Central Processing Platform & Living Quarters" which is awarded to Sapura, wonder if Armada and OGNC have a plan B if sapura fails to deliver.

It is what it is, IB has the money to manipulate the share price, they will control the price at 48sen today, exactly c63 exercise price, so obvious.

once c63 expires today then it should be better

@damnyarcher oil price shouldn’t have direct impact to armada’s profitability, similar to yinson and dialog, most of the revenue are secured by charter contract, which is a fixed rate, that’s why during 2020 when oil crash to 20USD but armada is still making good profit with strong cash flow. Hibiscus in the other hand is directly impacted by oil price. Only if low oil price persist for long term and causes lower investment in o&g sector then it would impact armada’s future prospect.

i guess it will have to show another year of consistent profit and pump up the order book then only it can get a higher valuation.

Wonder how low the share price can go if oil price normalize to 70+USD, although it has 0 impact to its profitability.

According to 2020 annual report, almost half of their floating rate loan are hedged with interest rate swap, every 0.5% increase in interest rate will reduce PBT by 18mil p.a

ic...thanks for the info @nikicheong

But i saw from an old news it should be a consortium between armada, MTC and shapoorji?

https://www.pressreader.com/malaysia/the-borneo-post-sabah/20211023/282080575038666

https://www.upstreamonline.com/exclusive/indian-malaysian-venture-submit-sole-bid-for-limbayong-floater/2-1-1168491

Not sure if this is referring to Armada?

any details on the new contract?

------------------------------

nikicheong We can expect finalisation of new contract within the coming two months.
24/12/2021 4:35 PM

@Prudentinv, There's no problem for auditor to report directly to independent director if they found serious accounting issue. The independent director is suppose to be the check and balance role in corporate governance, overseeing the managing directors and ensure the directors are not using the company for their own interest. Imagine the CEO cook the book, do you think he will admit to the auditor? Thus the subsequent action is to communicate the issue with the independent directors, if there is a strong case, the independent directors, especially the risk committee, should challenge the issue with the managing directors at the board level. If the managing director is the sole largest shareholder, usually it will end up the independent directors resigning, since there's nothing much they can do.

@pearlwhite can you then address why did serbak default on the coupon payment and how do they plan to resolve this?

if serba has made the payment, they would have announced that coupon payment has been made, but instead serba said "it has yet to receive any notice of default in response", meaning that serba has already defaulted the payment, but haven't receive the notice YET, the notice will come sooner or later.

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Posted by Prudentinv > Dec 14, 2021 12:20 PM | Report Abuse

News keep spreading on the default of payment but the owner of bond holder did not give them notice of default. Do you notice this?

To me the only concern with armada is the diminishing order book, from 24bil 3years ago till now around 14bil, still enough to cover for the next 4-5 years but they'll need to replenish it very soon, as a comparison Yinson has 40bil+ orderbook. Fundamental wise as of now Armada is strong, hope they could win a few FPSO tender moving forward.

The reason i think it drop it because contra players bought it after a good Q3 result, and selling them before t+3.

Copy from klse forum, not sure if the news is legit, make your own judgement:

Update on ATAIMS

1. Dyson has moved out most of their lines out of ATA . Only left with handheld vacuum cleaner and handheld hair dryer.
2. The lines have moved to SKP Resources, Mei Ban and VS Inds
3. This move by Dyson will reduce ATAIMS revenue by RM1.0 bil .

ATAIMS financial performance is likely to stay weak as it needs to find clients to fill the void left by Dyson. Lack of workers make it difficult for them to pitch for new clients.

Agree, if next year oil price average around 72usd then it’s very good for armada. Even oil price dive below 20USD temporary last year did not impact armada profitability, unless oil stays at 30 USD for few years then we might see negative impact on armada.

https://themalaysianreserve.com/2021/10/27/serba-dinamiks-special-audit-review-facing-operational-matters/

https://www.klsescreener.com/v2/news/view/900145/bursa-rejects-scib-s-request-for-extension-of-time-to-issue-annual-report

officially GG.com

Read carefully -> Company's securities will be suspended with effect from 2.30 p.m., Friday, 22 October 2021 until further notice

UNTIL FURTHER NOTICE, it might continue to suspend on Monday or even for the whole October

AAX 40cents in a few of years? what a joke looking back at this old post.

https://www.theedgemarkets.com/article/iwhcrecs-rm74-billion-deal-buy-60-stake-bandar-malaysia-falls-through

You would be surprised to find that Block 7 LLC was registered on 25/3/2020 and EFIRE was registered on 26/3/2020 in UAE business registry, just one day apart. This is another red flag for me.

Reached your cut loss point within minutes lol

Posted by rr88 > Jun 25, 2021 2:44 PM | Report Abuse

5000 lots matched at 0.455. Total bought 10000 lots at 0.465 avg. Now i will watch like a hawk everyday that my cut lost point of 0.44.

Quote from theEdge:
"Ilyas, who made his money in the auto trade in the 1990s, is chairman of AP Holdings Bhd. According to its website, Ilyas is the one who leads the company. AP Holdings has a unit, Koperasi Amanah Pelaburan Bhd, which in turn invested in Awesome TV — a free-to-air Malaysian television channel owned by Awesome Media Network Sdn Bhd.

From the Bursa Malaysia announcement of their appointments to Serba Dinamik, it is stated that Masleena is a director of AP Holdings, while Johan is the managing director of Awesome Media Network, which has been reported as part of AP’s group of companies.

This raises eyebrows as they are all connected. Masleen and Johan report to Mohamed Ilyas either directly or indirectly. "

So based on theEdge, Ilyas and Johan are connected, and Ilyas has just been appointment to chairman last week, the ex-chairman resigned, and then Johan was designated as chairman of audit committee today, looks like a big RED FLAG to me here.

Maybe they just detele the post to avoid confusion. But if you try to find Block 7 LLC registration information in UAE, it shows that the managing director is "Mohd Abdul Karim Bin Abdullah". If block 7 and serbak has the same managing director, does it consider as related party transaction? Need some expertise to answer that. Another finding on EFIRE capital since block 7 ownership has been transaferred to EFIRE somewhere around Mar 2021, company registration info shows that Block 7 was registerd at 25/3/2020 and EFIRE at 26/3/2020, might be just a coincidence that both company was registered 1 day apart?

Posted by probability > Jun 22, 2021 5:30 PM | Report Abuse

yes abu dhabi use LLC.... deleted may be coz of it was causing confusion (to correct it) may be

Posted by Windy1974 > Jun 22, 2021 5:28 PM | Report Abuse

Ok. then why delete?
LLC means limited liability company. Although i am not familiar with Abu Dhabi, they use LLC?

Quote from the announcement:

"AN was incorporated in the United States of America on 4 January 2021 with business
address in 1985 W Henderson Road #2220, Columbus, Ohio 43220 USA, with a
current issued share capital of USD100,000.00 comprising 1,000,000 ordinary shares.
The principal activities of AN are manufacturing non-sterile, powder-free nitrile gloves
for use by healthcare, government and other industries such as retail & food service.

The present directors of AN is Jacob Block. "

AN has just established early this year, with share capital of USD100k and one owner, question raised as if AN has the capability to pay for the project?

Hi DK, can please add me to the private chat group. Thanks

Quoting from financial report FY19, Tadmax is planning to dispose 100% stake in PIPP:

"We aim to respond to forthcoming market challenges with versatility and decisiveness. In addressing the challenging market environment, we have adjusted our long-term strategy to include the divestment of our interest in the Energy Business sector to pursue a game plan which promises a much safer return with relatively lower venture risks. Subject to the securing of all the
necessary approvals or consents from relevant governmental and/or regulatory bodies, this divestment exercise will see a full disposal of the Group’s 100% stakes of its wholly-owned subsidiary, Pulau Indah Power Plant Sdn. Bhd. (formerly known as Tadmax Indah Power Sdn. Bhd.) to both Worldwide Holdings Berhad and Korea Electric Power Corporation in the forthcoming financial year."