Posted by nikicheong > 2024-08-23 12:36 | Report Abuse

Obviously management won't commit to it, but too much lazy capital rolling around is unproductive and I'm sure the larger shareholders would rather it be paid out than sit and do nothing.

Posted by nikicheong > 2024-08-23 12:36 | Report Abuse

Fo you have UOB latest report?

Posted by Robert Waters > 2024-08-23 15:38 | Report Abuse

Downgrade by IB. I guess tired of the BS and no new projects.
Bumi Armada Cut to Hold From Buy by Hong Leong IB >5210.KU

Posted by Balian de Ibelin > 2024-08-23 15:44 | Report Abuse

Armada is now a wildly speculative stock with no future if things continue the same.

"If you do nothing, tomorrow will be the same as today, except 1 day closer to death."

Good to see at least some people bought it low below 50 sen 🤣

Posted by Gabriel Khoo > 2 months ago | Report Abuse

1H24 core profit beat expectations, comprising 60%/58% of our/consensus estimates. Excluding a RM53m upward revision of the daily operating fee of FPSO Olombendo (this portion was recognised in 1Q24 and for the 2023 period), the positive deviation in 2Q24 provided a boost in associate income. Out of this, RM8.9m associate income is related to Bumi Armada’s (BAB) entitlement to works executed for the 30%owned associate FPSO Armada Sterling V (ASV), between the period of first oil in Jan 24 to the delayed final acceptance that was concluded only in July.  2Q24 EBITDA of RM360m in line with quarterly average (2Q23: RM183m; 1Q24: RM417m). Subsea vessels remain underutilised. Other than ASV5, there were no unusual trends in the FPSOs, which were expected to deliver higher earnings relative to 1H23. This was mainly due to: a) FPSO Kraken’s downtime in 1H23 for the failure of the hydraulic submersible pump (HSP) transformers, and b) FPSO Olombendo’s higher revenue base after the daily fee revision. As expected, FPSO Kraken’s first yearly extension option (out of 17) was exercised into firm contract for Apr 24 to Mar 25, at 70% lower charter rates.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Firm orderbook boosted from RM9.7b to RM12.1b qoq in 2Q24. Albeit delayed due to various commissioning issues involving both sides ie the contractors Sharporji Energy and BAB, and the client Oil & Natural Gas Corp (ONGC), BAB will recognise its 30% share of the full bareboat charter for the nine-year contract. We noted that BAB’s firm orderbook from the JV FPSOs increased qoq from RM1.6b to RM4.3b in 2Q24, which clearly assumed a quarterly burn rate of RM0.3b-0.4b and the US$2.1b ASV contract.  However, ASV has have a risk of claim adjustments. We understand that ASV will be recognised as an operating lease accounting. However, Upstream articles reported that payment dispute issues still lingered even in Jun 24. We understand from management that while the RM9m associate income was recognised based on entitled work done, it is still awaiting the outcome of a joint delay analysis, and any additional outstanding claims are still being negotiated. However, BAB was unable to guide when these processes are expected to be completed. Hence, despite having achieved final acceptance, we do not discount the risks of further volatility in ASV earnings until all the processes mentioned earlier reach a resolution.  FPSO Kraken may have another impairment by end-24, given that the extension contracts were exercised on a yearly basis. To recap, BAB incurred RM514m impairment on FPSO Kraken in 4Q23. This was not related to the downtime due to HSP transformers failures nor the costs of repair, as the FPSO production recovered a few months after the incident. It was due to changes in macro-assumptions like discount rate (8.5% was assumed) and inflation rate. At that time, management guided that the residual value assumed was already conservative at 2%.  However, BAB still used the straight-line depreciation method and this included the 17 years of optional periods. In contrast, Enquest (the client) employed the unit of production method depreciation on the FPSO. Now, we believe BAB is reassessing its method of depreciation, but there is no guidance until 4Q24. We also do not discount other reasons that necessitates another impairment review so soon after 4Q23. This is despite BAB’s guidance that it does not need to follow Enquest’ method of depreciation.  Upgrade 2024-26 earnings by 7%/5%/14% respectively, after upgrading associate income assumption given that there are no more delays in recognising the full charter rate of ASV5, although we are mindful that there are still earnings risk related to these projects. VALUATION/RECOMMENDATION Upgrade to HOLD with an SOTP-based target price of RM0.55 after rolling over to 2025 valuations (5x 2025F PE). As expected, the share price retraced after we called a SELL on the stock back in Jul 24, when the rumours of the MISC-BAB merger surfaced. Despite the good earnings performance, we remain concerned that the low gearing may not be reflected as a positive market factor. BAB may appear as a discount to Yinson’s 15x PE valuation, but both peers are valued within 5-7x EV/EBITDA. ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) UPDATES

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Uob

Posted by 696988 > 2 months ago | Report Abuse

Big shareholder also didn't worry so much hahaha. Go start a business create your own future, don't hope on other that is not the right decision. When your company get listed please share here, if interested I will buy some share to support you. All the best in future.💪

Posted by kmchua888 > 2 months ago | Report Abuse

https://www.thestar.com.my/business/business-news/2024/08/26/bumi-armadain-good-positionto-bid-fornew-projects

Posted by RayLee > 2 months ago | Report Abuse

US oil giant expects no decline in oil consumption towards 2050

https://energywatch.com/EnergyNews/Oil___Gas/article17387104.ece

Posted by zonefinder > 2 months ago | Report Abuse

Cannot blame the overly negative comments due to lack of new project wins. Being an ongoing concern with rapidly improving financials, I don't believe the Management can be so incompetent as to be happy with current state of affairs ie zero wins. Not like there are no more use for the black stuff. Stay positive as good news will surely come..hopefully soon.

Posted by nikicheong > 2 months ago | Report Abuse

According to my sources, the two well drilling program has commenced at the TGT field. We should get a notification from Pharos Energy on the completion in the coming month or two.

This all but confirms that the FPSO will have to be chartered until Dec 2026 at the very least, but very likely beyond that, up to Dec 2031.

Expect around 2 sen per share contribution for each year of extension. So in the low case, there should be a boost of 4 sen, up to 14 sen for the company's valuation.

I believe this is not priced in sufficiently. This is the most certain, near-term win, that we can expect.

The official extension announcement from Bumi Armada may only come towards the end of the year, so there may be an opportunity to act on information arbitrage here.

Posted by ocbc > 2 months ago | Report Abuse

MISC needs to close the M&A with Armada fast or else asking price will be higher in the further !

Posted by Robert Waters > 2 months ago | Report Abuse

Droping like a rock on high volume. That clearly is an indication that no deal is about to be finalized.

Posted by TimCoke > 2 months ago | Report Abuse

i think 0.7 - 10% is fair

Posted by marlboroman2 > 2 months ago | Report Abuse

Catching a falling knife 😫

Posted by k3nthiew > 2 months ago | Report Abuse

What happened??

Posted by sheep > 2 months ago | Report Abuse

game over..wakaka

Posted by rohank71 > 2 months ago | Report Abuse

Rumours circulating that AKs health is not good. Not sure if true, but I thought it's good if guys took note of this. it can go either way.

Posted by nikicheong > 2 months ago | Report Abuse

Source, rohank71?

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Will be acquired then resuffle of the management team

Posted by rohank71 > 2 months ago | Report Abuse

#niki, since this morning a few friends have been sharing this "rumour". anyway, hope UT has a hold on it and manages BA well. I have no interest in BA, but will keep monitoring if opportunities arise in any AK Group of Companies.. Hope UT sells BA earlier.

Posted by rohank71 > 2 months ago | Report Abuse

Astro too took a dive today.. but not Maxis.

Posted by RayLee > 2 months ago | Report Abuse

It closes above 50 cents. Not yet game over

Posted by nikicheong > 2 months ago | Report Abuse

Ananda's demise might cause some panic selling, but does not alter the fundamentals of the company. By and large, the professionals and executives run the show at his businesses, including at Bumi Armada. If anything, it will be a solid opportunity if this heads to the lower 40 sen region to buy in the face of solid fundamentals.

Posted by RayLee > 2 months ago | Report Abuse

It didn't cause any panic selling ..

Posted by MM78 > 2 months ago | Report Abuse

RayLee, anything happened to Ananda lately ?

Posted by Penarak > 2 months ago | Report Abuse

Still languishing in the 0.50 range,with spurts to 0.53 but not being able to maintain .0.60 was there for a day or so.Overall a though stock to keep ahead.Keeps coming back despite good credentials.

Posted by Macgyver111 > 2 months ago | Report Abuse

OPEC+ has started discussing a possible delay to their planned easing of the production cuts after oil prices crashed in the past days to the lowest level in 9 months, sources in the alliance told Reuters on Wednesday.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

https://www.thestar.com.my/business/business-news/2024/09/06/misc-acquires-full-ownership-of-fpso-kikeh

Posted by Gabriel Khoo > 2 months ago | Report Abuse

MISC willing to increase stake for FPSO
Which analyst of the view that MISC will not increase explosure in FPSO?
Good indication ahead

Posted by Ninja _07 > 2 months ago | Report Abuse

Next week onwards can see price dropping .. all the way to 0.38

Posted by 696988 > 2 months ago | Report Abuse

0.38? you think this is goreng stock meh

Posted by Macgyver111 > 2 months ago | Report Abuse

I think tomorrow onwards the stock market will be slashed badly due to several reasons. 1st. rate cut and investors eyes on recession 2nd. oil price, which has been declining the past few days. 
Any comment on that?

Posted by Macgyver111 > 2 months ago | Report Abuse

0.38 consider ok.. hopefully not back to 0.25 again..mati lor, rambut hitam saya sdh beruban tunggu ni Armada naik..😂🤣

Posted by 696988 > 2 months ago | Report Abuse

Impossible back to 0.25 because that time covid-19 + brent oil price 33.

Currently, brent oil 71 same price as during 31,may,2021, armxdx price is 0.430 then the next day is 0.455 if get average will be 0.442 + on that time their averages qtr only have 120m+ and above.
Compare to current situation, same oil price but their average profit is 150m+ and above, + middle east war.

Current oil price drop because of (economic data from China and the U.S. revealed weaknesses in their manufacturing sectors, raising fears of declining demand. Additionally, potential increases in oil supply from Libya, due to political factions nearing an agreement, added downward pressure) take from Trading Economics website.

The most important thing is the next Fed interest rate decision, if interest rate is drop then will be good for economic. When all the money back to the market, everyone start working then oil demand going to increase, but have to depend on OPEC if they keep increasing production then oil price will maintain on same price if not mistaken.

Above comment that is not a suggestion for call buy or sell, if want to buy or sell please contact your own financial advisor.

Posted by nikicheong > 2 months ago | Report Abuse

I have averaged up at RM0.47. Long-term, I don't see much of a future given the lack of orderbook replenishment. But in the short to medium term, this looks attractive at current price levels. The risk-return pendulum is now in favour of getting superior returns at lower risk levels.

Thesis:

1. Commencement of full charter of Armada Sterling V - will trickle to bottomline from Q3 2024 onwards, roughly net profits of RM25mil to RM32mil.

2. Imminent charter contract extension for Armada TGT. It will either be a 2+5, or 1+1+1+... (individual annual extension for 7 years), or direct 7+0 extension. At the bare minimum, 2 years is all but confirmed, with a full 7 year extension highly likely eventually.

3. Subsea tieback to the Bressay field is imminent. Next year, there will be a return to drilling at the Kraken field. Taken together, this means the Kraken production will continue far into the 2030s and even beyond. Firm contract period ends in Q1 2025, the first year extension has been agreed. I anticipate continuous annual extensions, or maybe even a renegotiated long-term fixed contract.

4. Extension of the Armada Sterling II charter. The firm charter ended in Q1 2024 and it has entered the first annual extension period. I anticipate continuous annual extensions, or maybe even a renegotiated long-term fixed contract.

5. Debt overhang is all but removed. Bumi Armada has substantial capacity to repay the refinanced debt over the next 6 years from its cashflows from operations.

The above is not even taking into account potential new job win for the subsea vessels in the Caspian Sea (or even their potential divestment), nor does it factor in any new floating job win for Bumi Armada. There are a number of projects that might get awarded in the coming months/years that may add to the upside potential.

i. Shell CCS offshore Sarawak
ii. Sullom Voe FSRU in the North Sea
iii. Uniper FSIU/FCSIU in the UK (Bluestreak CO2)
iv. Madura FLNG
v. Akia PSC (upstream)
vi. Akia PSC (FPSO + FLNG)
vii. Additional PSC (upstream) in Indonesia
viii. Mid-size FPSO win - e.g. Salam-Patawali (Malaysia), Nam Du / U Minh (Vietnam)

Posted by nikicheong > 2 months ago | Report Abuse

I have been buying since 2020, always averaging up. My anchor purchase was way back in 2020 and been adding usually once or twice a year ever since. Average price is now RM0.3125 sen.

RM0.225 (2020) > RM0.310 (2021) > RM0.335 (2021) > RM0.39 (2022) RM0.45 (Kraken shutdown in 2023) > RM0.42 (Kraken restart before official announcement) > RM0.47 (now)

Posted by nikicheong > 2 months ago | Report Abuse

Kraken Field Summary

Average net production of 13,637 Boepd (2023: 13,082 Boepd) in the first half of 2024 was driven by 98.5% production uptime and 97% water injection efficiency. This exemplary performance is testament to the focus and collaboration between the EnQuest and Bumi Armada operational teams, and the parties are undertaking further process work to extend this excellent performance.

The Group is focused on enhancing the next phase of Kraken operations and is working with its joint venture partner to finalise infill drilling plans for 2025. Work is ongoing to mature the Enhanced Oil Recovery (‘EOR’) project, which presents a material upside to the existing Kraken base reservoir performance. The EnQuest team is advancing the Bressay gas import project as a subsea tieback to Kraken, which will displace the majority of the diesel currently used to power Kraken operations; driving a material reduction in FPSO emissions and materially reducing operating costs. In the second half of 2024, trials will also commence to assess the potential for hydrogenated vegetable oil to be used as a diesel alternative for the equipment that cannot be run on gas. The Kraken maintenance shutdown is ongoing and is expected to be completed within ten days (six days full shutdown and four days on single train operations). The key scope to be completed is the five-yearly swivel inspection.

Source: Enquest 2024 Half-year Results
https://www.enquest.com/fileadmin/content/press_release_pdfs/2024/EnQuest_HY_Results_RNS_vF.pdf

Posted by Investor128 > 2 months ago | Report Abuse

Armada has wiped off the accumulated losses. Is able to pay dividend from this year onward

Posted by ocbc > 2 months ago | Report Abuse

good move

Posted by TimCoke > 2 months ago | Report Abuse

too bad, w-shaped double bottom developed coincidently, trap again LOL

Posted by Heungheungloveyou > 2 months ago | Report Abuse

don't waste your time in this stock

Posted by MM78 > 2 months ago | Report Abuse

Thanks Niki, for your excellent write up on Armada.
It reveals some hidden potential for BA. Armada price is getting attractive once again.Tempted to add back part of what I sold earlier in stages if it falls a little further.

Posted by RayLee > 2 months ago | Report Abuse

I plan to average when it reach 1 year low price 🙂

Posted by nikicheong > 2 months ago | Report Abuse

FPSO contractors lining up for replacement of sizeable Malaysian floater

FPSO companies potentially lining up include Malaysia's MISC and Bumi Armada, India's Shapoorji Pallonji Energy and Singapore-based HBA Future Energy

https://www.upstreamonline.com/exclusive/fpso-contractors-lining-up-for-replacement-of-sizeable-malaysian-floater/2-1-1706125

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Is this related misc fpso kikeh in sabah?

Posted by Macgyver111 > 2 months ago | Report Abuse

I noticed that you guys talking about armada and shapoorji since 2023?
Nothing support the price.. gosh! 🙄🤔.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

PTTEP has launched a tender for a replacement floating production storage and offloading (FPSO) vessel for the Kikeh oil and gas field offshore Malaysia, aiming for operations by 2028. The current FPSO, deployed in 2007, supports the Kikeh, Siakap North, and Petai fields, tied to a Spar dry tree unit in waters 1,320 meters deep. FPSO players, including MISC, Bumi Armada, and Shapoorji Pallonji Energy, and HBA have shown interest, with technical offers expected by November 2024. The new FPSO will have a production capacity of 40,000-46,000 barrels per day (bpd) of oil and 90 million cubic feet per day (MMcfd) of gas, smaller than the current unit's 120,000 bpd and 150 MMcfd capacity. However, the transition is challenging as the new FPSO must connect to the existing Spar platform, requiring complex integration. Market skepticism also persists due to PTTEP's push for cost-effectiveness, which may limit contractor enthusiasm. XX Despite plans for a new vessel, there's speculation about extending the existing FPSO's life. MISC, which will take full control of the current FPSO in 2025, performed recent maintenance that could extend its service life by 10-20 years. If PTTEP considers prolonging the current unit's lease, it could affect the bid process for the replacement.

Posted by vespa > 2 months ago | Report Abuse

This heroic stock is in a moribund state