ARMADA (5210) - Bumi Armada in JV for Madura FPSO contract
April 14, 2015 : 10:33 AM MYT
Bumi Armada Bhd
(April 13, RM1.06)
Maintain buy with a fair value of RM1.45: Bumi Armada has entered into a joint venture (JV) with Indian conglomerate Shapoorji Pallonji and Co Pte Ltd to undertake the engineering, procurement, conversion and construction of a floating production, storage and offloading (FPSO) vessel. The JV (in which Bumi Armada has a 49% stake) will then deliver the completed FPSO vessel — for a sale price of US$500 million (RM1.85 billion) — to PT AGN for charter and deployment at the Madura BD Field, off East Java.
PT AGN is a consortium between Bumi Armada and PT Gema Marine Service. Recall that the consortium had earlier received an award from Husky-CNOOC Madura Ltd to supply an FPSO vessel for the Madura Field with a value of US$1.18 billion for a firm charter period of 10 years, and options worth US$147 million 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$450 million to US$500 million. 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 dollar equivalent of RM330 million.
The FPSO is expected to be delivered in the first quarter of financial year 2017 (FY17) which will then be immediately deployed in the field to commence operations. Our numbers remain unchanged as we have earlier expected a capital expenditure of about US$450 million for the Madura FPSO. In addition, the JV constructing and delivering the FPSO to PT AGN is not expected to have any material impact on Bumi Armada’s net earnings. The group’s firm order book of about RM24 billion (with extensions of up to RM13 billion) 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. We maintain our “buy” recommendation with a fair value of RM1.45 per share. — AmResearch, April 13
Bumi-Armada_14Apr15_theedgemarkets
http://www.theedgemarkets.com
April 14, 2015 : 10:33 AM MYT
Bumi Armada Bhd
(April 13, RM1.06)
Maintain buy with a fair value of RM1.45: Bumi Armada has entered into a joint venture (JV) with Indian conglomerate Shapoorji Pallonji and Co Pte Ltd to undertake the engineering, procurement, conversion and construction of a floating production, storage and offloading (FPSO) vessel. The JV (in which Bumi Armada has a 49% stake) will then deliver the completed FPSO vessel — for a sale price of US$500 million (RM1.85 billion) — to PT AGN for charter and deployment at the Madura BD Field, off East Java.
PT AGN is a consortium between Bumi Armada and PT Gema Marine Service. Recall that the consortium had earlier received an award from Husky-CNOOC Madura Ltd to supply an FPSO vessel for the Madura Field with a value of US$1.18 billion for a firm charter period of 10 years, and options worth US$147 million 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$450 million to US$500 million. 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 dollar equivalent of RM330 million.
The FPSO is expected to be delivered in the first quarter of financial year 2017 (FY17) which will then be immediately deployed in the field to commence operations. Our numbers remain unchanged as we have earlier expected a capital expenditure of about US$450 million for the Madura FPSO. In addition, the JV constructing and delivering the FPSO to PT AGN is not expected to have any material impact on Bumi Armada’s net earnings. The group’s firm order book of about RM24 billion (with extensions of up to RM13 billion) 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. We maintain our “buy” recommendation with a fair value of RM1.45 per share. — AmResearch, April 13
Bumi-Armada_14Apr15_theedgemarkets
http://www.theedgemarkets.com
