Thanks Niki for the explanation about queue jumping and getting better deal than asked due to the opening price. I have not experienced it in the past, as the broker was doing the orders for me (at RHB), but now with a discount broker I have that bonus available.
Since I have now some time between contracts having finished an FPSO in Korea, I will put extra diligence into this counter and similar ones. Seems like there are a few opportunities for us. I had Yinson for 10 years, so longer experience in this investment area than most. From all I know, it is NOT the time to sell Armada yet.
Gabriel, I started to read BA annual report. First 40 pages are about ESG. I was a bit worried that they may not priotized performance, but I realize that ESG is good for rating as investor's bank feature it prominently, so be it. Not going to complain about it at annual meeting. :-)
My opinion Armada should stop the conventional business model build and lease the FPSO. This business model is too risky for the company. Lesson learnt from Armada Claire, no one want the FPSO with contract termination history. One terminated contract could send the company into bankruptcy.
Armada should focus on JV model or EPCC with lower risk but of course with lower return.
Whatever model they use: lease, JV, EPCC, etc., they better have somethings as it has been long since last project. I am NOT for having a big order book as the inflation, scarcity of supply will likely bring prices up. But there should be some deals or better prospects. One important item for us, investors, is that it takes many years to sign the deals, deliver, operate and have contract renewed or terminated. We will likely move on to new opportunities and let others take the risk. I will be out for sure when P/E is 10+.
Likely no issue with Enquest, beginning May 2025 they will only pay 1/3rd rate so on a cost basis to Bumi Armada as the firm charter ends. As such, it will be even more attractive to keep leasing the FPSO (as long as they're producing a decent amount of oil, which does seem to be the case).
Full year 2022 earnings: EPS misses analyst expectations Full year 2022 results:
EPS: RM0.12 (up from RM0.11 in FY 2021). Revenue: RM2.41b (up 11% from FY 2021). Net income: RM732.4m (up 11% from FY 2021). Profit margin: 30% (in line with FY 2021).
Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 1.9%.
Revenue is expected to decline by 1.2% p.a. on average during the next 3 years, while revenues in the Energy Services industry in Malaysia are expected to grow by 1.2%.
Over the last 3 years on average, earnings per share has increased by 77% per year but the company’s share price has only increased by 60% per year, which means it is significantly lagging earnings growth.
In term of revenue and profit, Armada has exceeded Dialog. I believe the top financial performancer in Malaysia Oil and Gas industry beside Petronas subsidiaries.
But the risk involve in order book must be taken in. Revenue will start slow down after 2025 if no new order come in. Share price is forward looking. It won’t go any high as 2025 is approaching. Unless dividend start to declare.
AI content for Armada (I think, as it is so plain) A bit overconfident as estimate is usually not precise. Maybe +/- 20% So, how you miss it by 1.9% ? But this AI catches one thing. Revenues will decrease. My point is that new project is really needed. I noticed that workforce decreased from 2k to 900. Not a good sign long term. Cannot downsize perpetually. --- Full year 2022 BAB earnings: EPS misses analyst expectations Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 1.9%. Revenue is expected to decline by 1.2% p.a. on average during the next 3 years, while revenues in the Energy Services industry in Malaysia are expected to grow by 1.2%.
Great news about this Dorado FPSO project in West Australia. Remember that there is also Tuna opportunity in Asia (Indonesia). So it is not only Total Cameia, but a few other options as well.
Cameia is not a done deal man....quit spreading misinformation. TotalEnergies has been considering other possibilities for a few months now. Bumi Armada still has a chance, but no longer guaranteed to land the contract.
"Multiple sources told Upstream the negotiations to finalise the FPSO contract are far from settled due to issues around capital costs and access to financing."
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.
Personally, I think it was not a very wise move to dispose off all the OSVs. There is a huge shortage of OSVs emerging in the the offshore wind industry. BA could have converted these vessels for offshore wind farms use.
Armada could not afford to keep the money bleeding OSVs for the last few years, given its high debt. The impairments due to idled OSVs would have caused impairment each year. The idle OSV were becoming cancerous for the company before they were sold off. Armada could not have pared off the debt as fast if the OSVs were not sold off.
"壮士断腕" is a Chinese idiom that literally translates to "a hero cuts off his arm." The closest English equivalent might be "drastic measures" or "to make a sacrifice for a greater good." It implies a willingness to take extreme actions, such as making a difficult decision or enduring great hardship, in order to achieve a desired outcome or goal.
I see that BAB is issuing shares to management. They do it at 0.75. So the price is reasonable, but they will probably be acuired if stock goes above the price. Fair enough. Let them bring it up 10 sens. -------------------------------------------- Listing Date 10-May-2023 Management Incentive Plan No. of shared issued 92,800 Issue Price MYR 0.754
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Robert Waters
741 posts
Posted by Robert Waters > 2023-04-27 17:49 | Report Abuse
Thanks Niki for the explanation about queue jumping and getting better deal than asked due to the opening price. I have not experienced it in the past, as the broker was doing the orders for me (at RHB), but now with a discount broker I have that bonus available.
Since I have now some time between contracts having finished an FPSO in Korea, I will put extra diligence into this counter and similar ones. Seems like there are a few opportunities for us. I had Yinson for 10 years, so longer experience in this investment area than most. From all I know, it is NOT the time to sell Armada yet.