Bumi Armada's net profit doubles to RM48.11 million in Q1

PETALING JAYA: Bumi Armada Bhd’s net profit more than doubled to RM48.11 million versus RM23.43 million in the same quarter a year ago, driven by a non-cash impairment charge of RM17.9 million for a multipurpose construction vessel within the offshore marine services (OMS) segment and higher share of results of joint ventures.

However, the group said it was offset by higher finance costs due to the cessation of capitalisation of borrowing costs following the completion of a floating production storage and offloading (FPSO) vessel and a floating storage unit.

Bumi Armada’s revenue fell 6.2% from RM430.77 million to RM404.17 million on the back of recognition of supplementary payments for the Kraken FPSO project, lower offshore support vessel utilisation and lower contribution from the LukOil project in the Caspian Sea, which was offset by higher contribution from the Armada Olombendo FPSO and Armada LNG Mediterrana floating storage unit.

The group’s executive director and CEO Leon Harland said the first quarter performance reflected its transition phase and marked a recovery despite the continuing challenges in the market.

He noted that Bumi Armada started operations on both the Armada LNG Mediterrana FSU and the Armada Olombendo FPSO in Malta and Angola in the first quarter of 2017.

“We have also recently received first gas on the Karapan Armada Sterling III in Indonesia and we hope to soon deliver first oil on Armada Kraken in the UK sector of the North Sea.

Full charter income from all these projects will result in a significant improvement in revenue streams for the group throughout 2017,” he said.

Meanwhile, the subsea construction business is relatively stable on the back of Bumi Armada’s ongoing pipelaying activities in the Caspian Sea.

Going forward, Harland said the group continues to see a growing number of new project opportunities in the FPSO and floating storage regasification unit markets.