"We caution that the new US$50mil Lukoil contract to be completed in the Caspian Sea this year by the group’s 2 construction vessels – Installer and Constructor – may be discontinued by fresh sanctions on Russia’s invasion of Ukraine."

Hmmm, so this means Bumi Armada managed to secure a new contract already? How come they didn't announce to Bursa Malaysia, if so.

We maintain BUY on Bumi Armada with a higher sum-of -parts (SOP) based fair value of RM0.83/share (from an earlier RM0.76/share), which also reflects a neutral ESG rating of 3 stars and implies an FY22F PE of 8x, half of the FBM KLCI. Our higher SOP valuation stems from the huge net debt reduction of RM1.3bil in FY21 on the back of the group’s substantively higher cash flows.We lower our earnings by 13% for FY22F and 14% for FY23F on lower margins on the floating production and operation (FPO) segment despite the group registering a record core net profit of RM593mil (excluding net vessel impairments of RM19mil) in FY21. This was below expectations as the results came in at 8% below our estimate and 6% of consensus, stemming from higher lumpy operational and maintenance expenses from Armada Olombendo and increased losses from offshore marine services (OMS), which management plans to dispose of and discontinue.For FY21, the group’s revenue slid 3% YoY mainly due to the sale of 22 OMS vessels. However, a sharp turnaround in JV contributions in India (Sterling I And II) and Indonesia (Sterling II) , supported by significant reductions in depreciation charges (-10%) and finance costs (-19%) boosted core net profit by 23% YoY.On a QoQ comparison, Bumi Armada’s 4QFY21 core net profit fell 26% to RM118mil mainly due to the halving of offshore support vessel (OSV) revenue together with higher lumpy operational and maintenance expenses from Armada Olombendo and a RM29mil impairment from the 3 ice-class OSV vessels, which were subsequently sold in January 2022. The 4QFY21 FPO revenue increased by 2% to RM480mil with th e resolution of an unplanned shutdown at one of 2 trains at Armada Kraken. However, higher costs at Armada Olombendo dragged the division’s net profit 23% lower QoQ to RM260mil.For the OMS, in which the group plans to exit, only 3 vessels remain in operation, excluding a unit currently classified as non-current asset held-for-sale. We caution that the new US$50mil Lukoil contract to be completed in the Caspian Sea this year by the group’s 2 construction vessels – Installer and Constructor – may be discontinued by fresh sanctions on Russia’s invasion of Ukraine.Meanwhile, the group’s firm order book slid by 3% QoQ to RM13.6bil from revenue depletion. Together with optional extensions worth RM8.9bil, this translates to a comfortable 8.4x FY22F revenue.Valuation-wise, we reiterate our view that Bumi Armada’s FY22F PE of 5x is unjustified vs. the FBM KLCI’s 16x as the group has stabilised its core earnings and balance sheet health with the normalisation of Armada Kraken’s operations since 4QFY20.

Debt trend analysis:

https://i.ibb.co/g6SZdMq/barm2022.png

All in all, not a spectacular results, but fairly decent.

Expect Q1 2022 to be better, as there will not be lumpy O&M costs for Olombendo and better uptime for Kraken.

After doing all the adjustments, net profit comes in at around RM140mil (equivalent to EPS of 2.37 sen).

Profit to shareholders of RM118mil (inclusive of loss on disposal of RM28.5mil).

If remove the loss on disposal, profit to shareholders of RM146.5mil. Well done!

Today be the day. Godspeed, Armadians

Why is Armada going up LMAO, our profits/loss doesn't change with Ukraine war. Unlike others like Hibiscus which produce oil. Oh well, Mr Market being ever the manic.

BUMI ARMADA is hiring for the following positions to be based at Menara Perak, Kuala Lumpur.

1. Estimation Manager
2. Completion Manager
3. Subcontract Manager
4. Construction Manager

Candidates with minimum 10 years of relevant experience are encourage to apply. For interested talent, please send your updated CV to careers.my@bumiarmada.com and indicate the position title in email subject. Only shortlisted candidates will be notified.

Also weighted interest rate has been steadily falling, higher interest loans are being repaid first. So again, sensitivity will be lesser.

Still okay for Bumi Armada, cause at the end of the day their loans were taken out at higher interest rate levels. Back then our OPR also around 3.0% to 3.5%, same with the Fed funds rate.

Only alarming if interest rates overshoots the previous levels.

In any case, Bumi Armada has benefitted significantly from the low rate environment. It will be able to stomach gradual rate increases.

If court say release FFU but you still don't, what purpose and power of court???

Results week. Good luck all!

NOT Bumi Armada

Indian-Malaysian venture submit sole bid for Limbayong floater

Malaysian national oil company Petronas has received only one bid in its latest attempt to procure a floating production, storage and offloading vessel for the Limbayong project offshore Sabah, East Malaysia.

The bid for the FPSO contract was submitted by a consortium comprising Malaysia’s MTC and India’s Shapoorji Pallonji Oil & Gas (SP Oil & Gas).

The offer is being evaluated by Petronas, but multiple market sources expressed doubt whether MTC and Shapoorji would be awarded the contract given political complexities and question marks about the economics of the FPSO.

Limbayong is a prestigious project as it is Petronas’ first deep-water oilfield development in Malaysian waters.

However, the effort to secure the leased FPSO has been a stop-and-start affair for several years, with at least two previous bidding exercises.

This has taken a toll on FPSO contractors which have chosen to focus on other business opportunities and, hence, resulted in the current sole bid.

FPSO market sources were very surprised that Sabah International Petroleum (SIP), owned by the Sabah state government, did not submit an offer, although there were some suggestions in the market that a counter-offer could materialise featuring the brand new Sabah state company SMJ Petroleum.

Market sources were unanimous that the bidding exercise is heavily imbued with politics given the field is located in Sabah waters and recent agreements between Petronas and the Sabah state government ostensibly geared toward satisfying the state’s desire for a larger slice of its oil and gas pie.

MTC with Shapoorji and SIP were among the bidders in last year’s aborted FPSO tender process. Others contractors then interested included Bumi Armada, MISC and Yinson Holdings.

FPSO specs
It is understood the FPSO requirement is for a vessel capable of producing 60,000 barrels per day of liquids, including 40,000 bpd of oil, plus about 180 million cubic feet per day of gas.

Water injection facilities for up to 75,000 bpd would also be included. The FPSO is expected to have a nameplate storage capacity of 600,000 barrels of oil.

On offer previously was a firm 12-year lease period, and the contract carried two three-year options and another for a further two years.


One industry source said that TechnipFMC is pressing ahead with the subsea works on the deep-water project.

The London-headquartered subsea giant was tasked with the design, manufacture, delivery and installation of subsea trees, manifolds, umbilicals, flexible risers, flowlines, jumpers and other associated subsea hardware for the project.

At a ceremony to celebrate TechnipFMC’s contract, Petronas chief executive of upstream, Adif Zulkifli, said: “We hope the project… will give confidence and invite potential investors to collaborate further in maturing the country’s deep-water resources.

"Apart from monetisation, Limbayong will be a platform to enhance our internal capabilities in preparing for the next deep-water projects not only in Sabah but also in other regions.”


Companies such as Bluewater, Sofec, National Oilwell Varco’s APL division, and London Marine Consultants had been suggested as potential providers, and market sources confirmed that Bluewater, APL and London Marine are competing.

The Limbayong field contains an estimated proven and probable reserve of 139 million barrels of oil and 784 billion cubic feet of non-associated gas.

Water depths at Limbayong, which straddles blocks G, J and R offshore the state of Sabah, range to in excess of 1200 metres.

Petronas is understood to have a 90% interest with E&P Malaysian Ventures on 10%.

Petronas had not responded to a request for comment on the status of the Limbayong project and related FPSO tender at the time of publication.

Not Armada, MTC

Been expecting some new contract award news, any day now for the Mumbai Port FSRU.

Heard someone say the "White Rajah of Sarawak" is involved in this whole mess, and hence the insistence of not releasing the FFU.

Looks like Serba Dinamik management rather this drag on, even though it is a losing battle.

Will Pak Karim the swindler flee the country?

Is the FFU being suppressed because it brings to light the hidden Sarawakian hands behind this scam?

Will we ever learn the truth?

This Friday or next week?

Just find out that Karim is a Malaysian Chinese. Real name is a Chinese name. But pretend to be a big shot Bumi.

Can Bursa release it in the interest of shareholders and so action can be taken against the traitorous Karim & Co?

Is they gonna releaser the SIR?

Someone Dry Dock 1 and Dry Dock 2 also now heavily underutilised

Don't know if unlucky or what, but Dry Dock 3 is such a waste of money. Now no business, spend a billion ringgit on a wasted project. Before this they were cash rich and zero debt. Could have tutup kedai and given back 70 sen per share to shareholders based on cash value just 2 years ago. Pretty sad. The future is just bleak. Heavy engineering also no margins.

Epic value destruction

Patience, younglings. Greed is a virtue of the dark side.

I'm not sure why the second Bursa announcement is necessary. First announcement already made it clear the disposal was at.a loss. Maybe they're just adding some clarity, but personally I don't see anything new here. Makes sense the sale price was arrived at using DCF

Bumi Armada is in a relatively good position now. The debt levels are at a very manageable level. The net gearing has come down to some 1.7x times. Might reduce further to 1.5x by the Q4 2021 results. In the near future, there will be room to take on project debt for large scale projects.

A new contract for the Mumbai Port FSRU is due to be finalised this month. Later this year, expect one new FPSO award from Africa, and possibly new contract win in Russia for the subsea construction vessels.

All current ongoing projects are running smoothly, with significant upside in terms of the exercising of option periods for each of them.

Anybody got the full article?

Bumi Armada: Possible buoyant outcome for investors

https://www.theedgesingapore.com/capital/global-stocks/bumi-armada-possible-buoyant-outcome-investors

HUAT!!!

Patience, my men, is of utmost importance.

Will go below RM9, maybe even RM8. Regulatory overhang + ESG penalties mean there is very little buying interest.

Fundamentally though, TNB has a lot of value, much of which will be easily realised once the generation unit is spun off.

In the short term, there is price weakness. In the long term, there is deep value here.

Bad news. Situation in India not looking good. First oil delayed by a further six months at least to Dec 2022 from June 2022 (which itself was already a delay from November 2021).

https://www.upstreamonline.com/exclusive/deep-water-challenge-ongc-s-5-billion-indian-development-delayed-as-key-projects-lag/2-1-1134271

One is in India, 50-50 JV with Shapoorji. Will be finalised by Feb 2022.

Other possibilities are contract in the Caspian Sea and sale of Armada Claire.

Lots to look forward to in the new year. To Bumi Armada shareholders', may this coming year be a prosperous year. So much in the pipeline, so much potential to still be realised. To RM1 and beyond in the new year!

We can expect finalisation of new contract within the coming two months.

Quite funny, solid profits and yet price dropping.

Maybe because Q4 2021 might see softer earnings, as two FPSO have minor troubles (Kraken and TGT).

Debt Analysis:

https://i.ibb.co/9vzmjRx/image.png

AmInvestm retain buy @0.76

Net profit is RM153.4m, not RM161.5m.

There is one off gain on disposal, which is negated by impairment. So a core not profit of ~RM150m looks beautiful!

https://www.pharos.energy/investors/press-releases/tgt-infill-development-drilling-programme/

Very good news for Bumi Armada's TGT FPSO in Vietnam. Drilling works of 4 new wells have concluded. 2 more wells to be drilled in Q3 2022. These 4 new wells will extend the production plateau.

Note that Bumi Armada has a contract extension in place until 2024. Will these new wells coming on stream, there is a high likelihood of the contract being extended further as the field will be producing for 5+ years.

Also, to tie back the wells to the FPSO, Bumi Armada might be able to recognise one-off variation orders.

Results likely out within the next 10 days, good luck all!

Also, Kraken production issues seem to have been sorted. Bumi Armada might loose 1 to 2 weeks worth of revenue (~RM15 to 30mil hit to net profit in Q4), but that's just a small blip in the big picture.

Problems with Kraken. Need to keep an eye out for it!

Expecting around RM150mil core net profit, with upside potential up to RM180mil underpinned by steady JV/associates earnings contribution.

At RM150mil per quarter (RM600mil per year), it is under 5x price-to-earnings ratio.

Next year, earnings will jump with Armada Sterling 5 contribution from Q3 2022 onwards.

Also, expect contract for the SC vessels in the Caspian sea to materialise in the next few months.

Downside at the moment is that Armada Sterling 5 deployment may see delays due to issues at Sembcorp Marine. Nothing concrete at this point, but be prepared for any delays. The soft share price over the past week may be due to insiders selling as they know about this.

Big month. Results in under 4 weeks time!

@Goldberg, Armada and SIP are not the JV partners in the bid. SIP is on its own, Armada is with MTC and Shapoorji. Plus, the tender has been further postponed.

Slow and steady boys, slow and steady.

Chill guys. This is already a value buy at RM150mil/qtr (which is still P/E of less than 5x at current price levels!).

Let's not get too caught up in the macro, and focus on the fundamentals as long-term investors.

Slow and steady. Expecting some good news soon :)