Malaysia's Bumi Armada 1Q 2016 Net Profit Down 67.5% YOY to $5.7M
Malaysia’s offshore energy facilities and services provider Bumi Armada Berhad posted a net profit of $5.66 million (MYR 23.4 million) for first quarter 2016 (1Q 2016), down 67.5 percent from $17.42 million (MYR 72 million) a year ago, the firm said Tuesday in the release of its latest quarterly financial results.
Bumi Armada indicated that the slump in net profit was partly due to the firm’s acceptance of a non-cash impairment charge of $4.21 million (MYR 17.9 million). This was for the Armada Condor transport and installation vessel in the offshore marine services (OMS) business unit.
Meantime, 1Q 2016 reveneue fell 24.7 percent to $104.26 million (MYR 430.8 million), compared to $138.48 million (MYR 572.2 million) in the same period last year.
Bumi Armada noted that the revenue decline was partially a result of lower contributions from the Armada Claire FPSO (floating production, storage and offloading) as well as lower vessel utilization in its OMS business. Revenue for the FPSO and OMS segments, which accounted for 50.3 percent of the company’s total revenue, fell 25.6 percent and 23.8 percent in 1Q 2016, compared to the previous year.
The firm has also filed legal action against Woodside Petroleum Ltd.'s unit Woodside Energy Julimar Pty Ltd. as it seeks $283.5 million in damages for unlawful contract termination by the Australian oil and gas exploration and production company.
Looking ahead, the FPSO and floating gas solutions (FGS) units in Bumi Armada are focused on delivering three floating facilities. The Armada Kraken, Armada Olombendo and Karapan Armada Sterling III FPSOs as well as the FSU (floating storage unit) Armada LNG Mediteranna are targeted to leave Keppel’s yard in Singapore in the second half of 2016.
“Delivery of these projects will trigger a significant improvement in earnings and cash flow generation for the Group over full year 2017,” Bumi Armada said in the press release.
It added that although business in offshore support vessel (OSV) segment remains challenging, the company’s “strong position in the Caspian Sea with its subsea construction operations should help to stabilize overall earnings in the OMS business, where the order book stood at $677.63 million (MYR 2.8 billion) as at end March 2016.
Bumi Armada said its total order book as at end March 2016 stood at $8.8 billion (MYR 36.4 billion), comprising $5.85 billion (MYR 24.2 billion) in firm contracts and $2.95 billion (MYR 12.2 billion) of optional extensions.
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