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Market Daily Report: Bursa Malaysia Ends Nearly Flat As Construction Stocks Attract Buying

 KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.

Bumi Armada and MISC Explore Offshore Business Merger, Eyeing Global Expansion

1. US-China Tensions Impact Southeast Asia Trade Malaysia’s Trade Minister Zafrul Aziz highlighted short-term opportunities as companies move supply chains to Southeast Asia. Long-term concerns: Slower global growth, higher consumer costs, and sustained geopolitical tensions affecting trade patterns. 2. Malaysia Needs High-Growth Sectors to Boost Economy Economist Dr. Nungsari Ahmad Radhi emphasized targeting high-growth, high-risk sectors to improve economic sustainability and reduce income inequality. Focus on structural reforms in labor, land, and capital to drive growth and social equity. Stocks to Watch 1. Bumi Armada (ARMADA.MY) & MISC Bhd (MISC.MY) Merger Talks: Both companies are evaluating a merger of their offshore energy businesses, potentially forming a RM20 billion energy services entity . MISC Q3 Results: Net profit down 21% to RM338.9 million. Revenue fell 12% to RM2.96 billion , impacted by lower charter rates and operational costs. Declared 8 sen per share di...

Brokers Report: BAB - Completion Of Major Conversion Phase

Maintain outperform recommendation with an unchanged target price (TP) of RM0.90 Bumi Armada’s (BAB) 9MFY16 revenue fell to RM1.2bn (-23.9% YoY), with a net loss of RM591.6m (->100.0% YoY). Excluding the RM597.6m impairment predominantly provided for Armada Claire, core earnings would be RM85.5m (-62.5% YoY). Below expectations, BAB’s earnings only met 30.0% and 48.9% of ours and consensus’ estimates. Revenue remained weaker YoY with the completion of conversion activities for Kraken and ENI 1506 FPSOs, coupled with lower contribution from Armada Claire, Armada Perdana and Armada Perkasa, albeit partly offset by higher contribution from LukOil in the Caspian Sea. EBITDA, in the same trend, was lower by 36.7% YoY. Average OSV utilisation rate maintained at 55% however. BAB’s performance was in a lull, but going forward we are expecting a boost in earnings from the 4 major FPSO & FGS contributions, seeing first oil and/or gas in 2017. We retain our  Outperform r...

Brokers Report: Bumi Armada - Surprise Termination from Woodside

Downgrade to Underperform from Outperform with lower Target Price (TP) of RM0.80 Bumi Armada Bhd NEWS Last Friday, Bumi Armada Bhd (ARMADA) announced that it has received a Notice of Termination from its client Woodside Petroleum Ltd (Woodside) to terminate Armada Claire, the Floating Production Storage and Offloading (FPSO) unit, which has been operating at the Balnaves oilfield, north off Australia since first oil delivery in August 2014.  ARMADA states that the Notice of Termination is not valid and tantamount to a cancellation of convenience or a repudiation of contract, which is entitled for compensation. Hence, it intends to initiate legal proceedings against Woodside.  Recall that the contract is worth USD457m under a fouryear period expiring at 2018 with an option to extend up to 2022.  COMMENTS We were negatively surprised by this news having been guided that all the operating FPSOs are still intact during the 4Q15 analyst briefing last m...