ARMADA (5210) - AmResearch maintains Buy call on Bumi Armada
Monday, 13 April 2015
KUALA LUMPUR: AmResearch has maintained its Buy call on Bumi Armada with a fair value of RM1.45 a share, it said in a note on Monday.
It said Bumi Armada has entered into a JV with Indian conglomerate Shapoorji Pallonji and Co Pte Ltd (SPCL) to undertake the engineering, procurement, conversion and construction of an FPSO. The JV (in which Bumi Armada has a 49% stake) will then deliver the completed FPSO – for a sale price of US$500mil – to PT AGN for charter and deployment at the Madura BD Field, offshore East Java.
PT AGN is a consortium between Bumi Armada and PT Gema Marine Service (PT GMS). Recall that the consortium had earlier received an award from Husky-CNOOC Madura Limited (HCML) to supply an FPSO for the Madura Field with a value of US$1.18bil for a firm charter period of 10 years, and options worth US$147mil to extend for five more years.
"Bumi Armada estimates that the total financial commitment required by the JV to complete the FPSO conversion would range from US$450mil to US$500mil.
"The JV is expected to fund between 20% and 45% of its total financial commitment in the form of equity. However, the maximum funding obligations of Bumi Armada will be limited to the US$ equivalent of RM330mil," it noted.
The FPSO is expected to be delivered in 1QFY17 which will then be immediately deployed in the field to commence operations.
"Our numbers remain unchanged at this juncture, as we have earlier expected capex of US$450mil for the Madura FPSO. Additionally, the JV to construct and deliver the FPSO to PT AGN is not expected to have any material impact on Bumi Armada’s net earnings.
"Meanwhile, the group’s firm order book of RM24bil (with extensions of up to RM13bil) is expected to support the group’s earnings prospects.
"Substantial earnings contributions from the Kraken and 15/06 FPSO will kick-in in FY16 and FY17 upon the commencement of operations," it said.
http://www.thestar.com.my
Monday, 13 April 2015
KUALA LUMPUR: AmResearch has maintained its Buy call on Bumi Armada with a fair value of RM1.45 a share, it said in a note on Monday.
It said Bumi Armada has entered into a JV with Indian conglomerate Shapoorji Pallonji and Co Pte Ltd (SPCL) to undertake the engineering, procurement, conversion and construction of an FPSO. The JV (in which Bumi Armada has a 49% stake) will then deliver the completed FPSO – for a sale price of US$500mil – to PT AGN for charter and deployment at the Madura BD Field, offshore East Java.
PT AGN is a consortium between Bumi Armada and PT Gema Marine Service (PT GMS). Recall that the consortium had earlier received an award from Husky-CNOOC Madura Limited (HCML) to supply an FPSO for the Madura Field with a value of US$1.18bil for a firm charter period of 10 years, and options worth US$147mil to extend for five more years.
"Bumi Armada estimates that the total financial commitment required by the JV to complete the FPSO conversion would range from US$450mil to US$500mil.
"The JV is expected to fund between 20% and 45% of its total financial commitment in the form of equity. However, the maximum funding obligations of Bumi Armada will be limited to the US$ equivalent of RM330mil," it noted.
The FPSO is expected to be delivered in 1QFY17 which will then be immediately deployed in the field to commence operations.
"Our numbers remain unchanged at this juncture, as we have earlier expected capex of US$450mil for the Madura FPSO. Additionally, the JV to construct and deliver the FPSO to PT AGN is not expected to have any material impact on Bumi Armada’s net earnings.
"Meanwhile, the group’s firm order book of RM24bil (with extensions of up to RM13bil) is expected to support the group’s earnings prospects.
"Substantial earnings contributions from the Kraken and 15/06 FPSO will kick-in in FY16 and FY17 upon the commencement of operations," it said.
http://www.thestar.com.my
