KUALA LUMPUR (Nov 20): Bumi Armada Bhd's third quarter net profit fell from a year earlier, leading to a nine-month net loss on less demand for its offshore support vessels (OSV) from the oil and gas (O&G) sector.

In a statement to Bursa Malaysia today, Bumi Armada said net profit fell 35% to RM70 million in the third quarter ended Sept 30, 2015 (3QFY15) from RM108.09 million. Revenue was lower at RM559.46 million versus RM636.51 million. 

“The FPSO (floating production storage and offloading) business is the main revenue and EBITDA generator of the group and continues to deliver. The weak oil price and negative short-term outlook for the O&G market however, continues to put pressure on the utilisation of our OSV and subsea vessels. 

"As part of our rationalisation and efficiency plans, we have merged the OSV and T&I businesses into a new offshore marine services unit and have made further reductions in headcount, primarily related to the lower activities in the OSV and T&I businesses," Bumi Armada acting chief executive officer Chan Chee Beng said in a statement today.

T&I stands for transport and installation operations for the O&G industry. 

Bumi Armada's cumulative 9MFY15 net loss at RM149.49 million compared with a net profit of RM271.25 million a year earlier. Revenue fell to RM1.59 billion from RM1.7 billion.

Bumi Armada said the net loss came on asset impairment and depreciation amid hgher finance cost, and taxes. The group said revenue fell as "OSV  vessel  utilisation  continued  to  be  adversely  affected  by  the  challenging O&G market environment."

Looking ahead, the company said it was mindful of a challenging business landscape  amid lower crude oil prices.

Bumi Armada said such backdrop could lead to less business from its clients. 

"The offshore O&G sector remains challenged by the continuing uncertainty on the short-term to medium-term  outlook  for  global  energy  supply  and  demand. Oil companies  continue  to  focus  on  capital  and  cost management, and this will in turn result in continued deferment of 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. In the meantime, the group will continue to pursue new opportunities that would meet the internal criteria for balanced risk and returns, while it remains focused on improving efficiency and productivity in our current structure," Bumi Armada said.

At 10:06am today, Bumi Armada shares fell one sen or 1% to RM1 for a market capitalisation of RM5.87 billion. The stock saw 554,300 shares done.

Bumi Armada's share trade was suspended between 9am and 10am today in conjunction with its financial announcement.