Bumi Armada's 2014 Net Profit Dips 49.3% to $60.6M as OSV, T&I Underperform

Bumi Armada Berhad, a Malaysia-based international offshore oilfield services provider, reported a sharp decline in net profit for 2014 to $60.6 million (MYR 218.7), down 49.3 percent from the previous year's $119.6 million (MYR 431.2 million), according to financial results released by the company Thursday.

The company attributed the fall in net profit to lower contributions from the offshore support vessel (OSV) and transport and installation (T&I) businesses as well as impairments for available-for-sale financial assets and allowances for trade receivables, which amounted to approximately $26.9 million (MYR 97 million). In addition, Bumi Armada also recognized cost relating to additional work on an on-going floating production, storage and offloading (FPSO) facilities.

There was however a 16 percent increase in revenue to $665.5 million (MYR 2.4 billion) for the year, up from $582.3 million (MYR  2.1 billion) that was secured in 2013.

Meanwhile, Bumi Armada revealed that revenue generated in the fourth quarter of 2014 (4Q 2014) rose to $194.6 million (MYR 701.8 million) from $154.4 million (MYR 556.7 million) year-on-year, but the firm registered a net loss of $14.6 million (MYR 52.6 million) against a net profit of $24.5 million (MYR 88.3 million) in 4Q 2013.

“The Company’s revenue grew 16 percent in 2014 with all three core segments registering healthy growth. With the deterioration in oil prices and increasing challenges in the market, we felt it was prudent and necessary to make allowances for some trade receivables that we assessed to be at risk going forward ... We remain focused on executing and delivering our three FPSO projects which are under conversion, as well as managing our OSV and T&I businesses through what will be a challenging year in 2015. We have initiated cost reduction (which would include headcount rationalization) and capital budgeting measures to enhance our productivity and efficiency,” Acting CEO and Executive Director, Chan Chee Beng said in a press release.

“The FPSO, OSV and T&I businesses continue to generate positive contributions to the profits of the Company and we continue to execute on our firm orderbook of $6.9 billion (MYR 24.5 billion) and the Company remains financially stable, with a cash balance of $915.1 million (MYR 3.3 billion), helped by the Rights Issue which raised $526.9 million (MYR 1.9 billion), and a healthy debt to equity level of 0.9 times. The Company also generated positive cash flow from operations of $188.6 million (MYR 680 million) in 2014,” Chan added.

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