Bumi Armada Q1 earnings flat on higher impairment loss, finance costs

KUALA LUMPUR: Bumi Armada Bhd’s net profit for the first quarter ended March 31, 2018 came in almost flat at RM48.42 million from RM48.11 million a year ago, mainly due to higher allowance for impairment losses, lower share of results of joint ventures and higher finance costs due to the cessation of capitalisation of borrowing costs following the completion of certain floating production, storage and offloading (FPSO) vessels.
This was despite the Malaysia-based international offshore energy facilities and services provider posting a 48.5% increase in revenue to RM600.34 million for the quarter under review, compared with the RM404.17 million announced in Q1 2017, with stronger contributions from the floating production and operation (FPO) business.
Executive director and CEO Leon Harland said over the first quarter of 2018, Bumi Armada has continued to achieve safe operations and high operational uptimes across its fleet of vessels.
“The financial results for 1Q’18 have been negatively influenced by Erin Petroleum Nigeria Limited (EPNL) abandonment of its operations in the Oyo field, Nigeria and the associated costs that we expect to incur as result of it. All our other operating FPO units have contributed positively towards revenue during 1Q’18,” he said.
Armada Olombendo in Angola has since achieved final acceptance on May 17 . She has been performing well for our client ENI Angola since first oil was produced with high uptimes and excellent safety records.
With the final acceptance now complete, the group will recognise the full charter rate for the FPSO going forward.
“In mean time, we continue to work towards the final acceptance of the Armada Kraken FPSO in the UK North Sea. At the same time, we see a growing interest from clients for new FPSO facilities and our FPO teams are actively pursuing new projects.
“The offshore support vessels (OSV) utilisation remained weak in Q1 2018 and despite stronger oil prices over the past few months, we have yet to see the signs of recovery in demand to be converted in actual increase in OSV charter contracts and rates.”