Tuesday May 29, 2012
Bumi Armada bullish
It’s tendering for five contracts, expects to see some awards from June
KUALA LUMPUR: Bumi Armada Bhd, which saw net profit for the first quarter ended March 31 rose 9.3% to RM89.7mil from RM82.07mil a year earlier, continues to bid for more projects both locally and overseas to boost its orderbook.
Bumi Armada revenue, however, fell to RM335.1mil in the first quarter from RM376.1mil previously. Its earnings per share (EPS) fell to 3.06 sen from 3.64 sen before.
Chief executive officer Hassan Basma said the group had a firm orderbook of RM7bil as at March 31 and an additional RM3bil optional orders that could easily last the company for the next five years.
“FPSO (floating production, storage and offloading) contract flow has been slow at the beginning of this year. From June onwards, we'll see some contracts (to be awarded).
“We are actively tendering for five contracts at the moment and hopefully we can get two contracts just like we did last year,” he said at a briefing to announce its financial results.
“For this year, we are still continuing to bid on projects in Asia like Indonesia, India and Malaysia as well as in Africa for the FPSO segment,” he added.
Without disclosing details, Hassan said the FPSO projects its was bidding for were substantial to the tune of US$700mil to US$800mil for each contract.
He said the group was well established in the FPSO business and was close to its target to become the fourth-largest FPSO operator from the current sixth position.
Hassan added that its orderbook would show an improvement in the current quarter ending June 30 as it had yet to incorporate some contracts it secured this quarter.
“We're no longer jaguh kampung. We're actually in a lot of countries; in 12 countries across four continents,” he said, adding that it would be setting up an office in Rio de Janeiro, Brazil.
Bumi Armada will also be investing in more assets to expand its fleets from the current 43 vessels.
To a question, Hassan expects oil prices to remain high. “A lot of reports put it (oil prices) above US$100 a barrel. There's no cheap oil anymore. (However) it is a good indicator for our business segment,” he said.
In a notes accompanying its results, Bumi Armada said the outlook remained positive, with oil price expected to remain well above US$70 a barrel and capital expenditure in the industry forecast to increase year-on-year by more than 10%.
“Notwithstanding the geopolitical upheavals in the Middle East and the sovereign debt crisis in Europe, Bumi Armada anticipates another year of high activity across all its segments of FPSO, offshore supply vessel, transportation and infrastructure and oilfield services.
“Bumi Armada expects to consolidate its presence in Asia, Africa and Latin America and increase its market penetration and share across its business sectors,” it said.