Bumi Armada achieves RM123.73m net profit in Q3

PETALING JAYA: Bumi Armada Bhd registered a net profit of RM123.73 million in the third quarter ended Sept 30, 2017 compared with a net loss of RM96.71 million in the same period last year.

Revenue for the quarter rose 70% to RM641.40 million from RM377.51 million a year ago, primarily due to the increase in revenue from its floating, production and operations (FPO) division as delivery of the new projects continued to yield improving contributions.

The earnings growth was also supported by the gain from disposal of the Armada Intrepid in the quarter under review.

In a filing with Bursa Malaysia today, the group said it expects to see further developments in the current floating, production, storage and offloading (FPSO) projects over the rest of 2017, which will be positive for the group’s FPO business revenue in 2018.

“For the offshore marine services (OMS) business, we expect to see a decline in activity in Q4 2017 due to winter in the Caspian region and the monsoon season in Southeast Asia, which will likely result in lower earnings for this business during the last quarter of 2017,” it said.

The group’s executive director and CEO Leon Harland said in a separate statement that the vessel utilisation rate in the OMS segment improved slightly during the quarter in question.

“All in all, a positive quarter and we expect to see this trend continue in the fourth quarter, especially in the FPO business, which is the largest contributor to our revenue. On new opportunities, we continue to pursue new projects, which we have identified as suitable in terms of both risk and reward. It is unlikely, however, that any of these pending projects will be decided until the first half of 2018, at the earliest,” Harland said.

For the nine months ended Sept 30, 2017, the group registered a net profit of RM288.43 million compared with a net loss of RM591.61 million a year ago, as the previous year’s earnings were negatively impacted by a non-cash impairment charge of RM592.4 million for FPSO and OMS multipurpose construction vessels.

Revenue for the period improved by 44% to RM1.74 billion from RM1.21 billion a year ago driven by increased revenue from Armada Olombendo FPSO, Armada Kraken FPSO, Armada LNG Mediterrana Floating Storage Unit, and one-off revenue recognised based on work completed on the LukOil project arising from the signing of the supplementary agreement, offset by lower OSV(3) vessel utilisation.

Bumi Armada’s share price gained two sen to 78.5 sen with some 68.8 million shares done.