Thursday 28 Mar 2024
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KUALA LUMPUR (May 26): Oil and gas (O&G) offshore oilfield services provider Bumi Armada Bhd announced that its net profit for the first quarter ended March 31, 2015 (1QFY15) rose 11% to RM72.05 million or 1.23 sen per share, from RM64.78 million or 1.37 sen per share a year ago, on improved revenue.

Its revenue was at RM572.15 million, up 22% from RM468.92 million a year ago.

Segmentally, Bumi Armada’s floating production, storage and offloading (FPSO) division saw its segment profit improved 36.88%, while profit for its transport and installation (T&I) division soared 969.98%.

However, profit contribution from its offshore support vessel plunged 98.4%, on lower utilisation of Class B vessels due to challenging market conditions.

“Despite the ongoing weakness in the global O&G sector, we are encouraged by the financial results Bumi Armada has posted in 1QFY15. Recognising that the industry as a whole is going through challenging times, we continue our efforts to reduce cost, seek further ways to enhance efficiency and execute well on our existing projects,” its executive director and acting chief executive officer Chan Chee Beng said in a filing with Bursa Malaysia this evening.

Bumi Armada’s order book in 1QFY15 stood at RM38.9 billion, of which RM25.6 billion are on firm contract periods and RM13.3 billion are on optional extension basis.

On outlook, Bumi Armada (fundamental: 1.05; valuation: 0.85) expects the offshore O&G sector to remain challenging, on continuing uncertainty on the short- to medium-term outlook for global energy supply and demand.

“The oil companies continue to focus on capital and cost management, and this will in turn continue to defer decision making and awards on new projects. The deferment of new projects is likely to have a negative impact on the demand for the assets and services of the group,” the group said, adding that it will continue to selectively participate in new FPSO tenders.

Notwithstanding that, it remains positive on the long-term outlook of the offshore O&G services industry.

The stock plunged 55.28% to RM1.01 on Dec 15 last year from RM2.259 on June 20, in line with the downward trend of the crude oil price, wiping out RM13.25 billion in its market capitalisation to RM5.92 billion.

The stock has since recovered some losses and closed at RM1.23 today, down 1 sen or 0.81% from yesterday’s close, for a market capitalisation to RM7.216 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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