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Results Note – Bumi Armada (ADD, maintain) - Cruising smoothly




Affin Hwang Investment Bank Bhd


20 Aug 2013





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Strong 1H13 net profit of RM222m (+22% yoy), within expectations. Bumi Armada reported a strong 1H13 net profit of RM221.6m (+22% yoy) of which was driven by a higher revenue (+34.8% yoy), lower finance cost and a lower effective tax rate of 11.5% (from 16.8%). 1H13 revenue was higher across all major divisions: (i) FPSO (RM386m, +14% yoy) driven by higher O&M revenue related to client variation orders and additional revenue from tanker vessels held as FPSO conversion candidates; (ii) OSV (RM293.2m, +24.3% yoy) driven by additional vessels and higher fleet utilisation; and (iii) T&I (RM290.7m, +104% yoy) due to ramp up of activity in the LukOil project and higher utilisation of the Armada Hawk. While the group’s 1H13 net profit accounts for only 43% of consensus and 40% of Affin’s full year earnings forecast, we deem the results as inline. We expect Bumi Armada to report a stronger 2H earnings, driven by new FPSO contract(s) (possibly Kraken, Madura) and stronger OSV earnings on contributions from new vessels.

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