Bumi Armada’s 3Q12 revenue and net profit increased by 14% and 3% YoY to RM462m and RM95m respectively. On a nine-month period, revenue was flat at RM1.2b, while net profit increased by 18% to RM277m. Despite the increases, the results were very much below expectations as 9MFY12 net profits formed only 68% and 60% of ours and the street’s full year estimates. As the group had not secured any new FPSO contracts year-to-date, we believe it may be hard to meet the street’s expectation of two FPSO contract wins (and our projection of just one win) in 2012. Looking ahead, we continue to project one FPSO contract win per year for FY13-14F and believe our estimate is conservative (versus the street’s). We adjusted our model for 3Q results, but kept our FY13F estimates largely unchanged. As we roll forward our estimates for FY13F, our fair value estimate rises slightly to RM3.48 (previously RM3.36), still on 20x PER. Maintain HOLD.
3Q12 results below
Bumi Armada’s 3Q12 revenue and net profit increased by 14% and 3% YoY to RM462m and RM95m respectively. On a nine-month period, revenue was flat at RM1.2b, while net profit increased by 18% to RM277m. Despite the increases, the results were very much below expectations as 9MFY12 net profits formed only 68% and 60% of ours and the street’s full year estimates. As the group had not secured any new FPSO contracts year-to-date, we believe it may be hard to meet the street’s expectation of two FPSO wins (and our projection of just one win) in 2012.
Segmental review
During the quarter, FPSO revenue increased by 11% QoQ to RM191m, attributable to sustained high uptime for its fleet and day-rate increase on Armada Perksa. OSV revenue increased by 25.4% QoQ to RM153m, on higher utilization rate (3Q12: 87%; 2Q12: 82%) and increased fleet tonnage (Armada Tuah 107, Armada Tuah 301 and Armada 302). T&I (Transport and Installation) revenue increased by 29% YoY to RM118m due to contribution from the LukOil contract and charter hire with Momentum Engineering secured by Amada Installer.
RM5.6m FX loss
Despite the higher revenue in almost all its business segments, EBITDA margin fell to 52% in 3Q12 (2Q12: 63%), largely due to RM5.6m of FX losses on translation and derivatives (2Q12: RM9.6m of FX gains). This arose as its charter contracts are typically denominated in USD and any unsettled balances at quarter-end would be translated into the reporting currency using the prevailing rate, resulting in unrealized fx gains or losses.
FPSO contracts to come in 2013?
We adjusted our model for 3Q results, but kept our FY13F estimates largely unchanged. In view of the global uncertainty, we believe our projection of one FPSO win per year for FY13-14F is conservative (versus the street's expectation of two wins per year). As we roll forward our estimates for FY13F, our fair value estimate rises slightly to RM3.48 (previously RM3.36), still on 20x PER. Maintain HOLD.
Bumi Armada’s 3Q12 revenue and net profit increased by 14% and 3% YoY to RM462m and RM95m respectively. On a nine-month period, revenue was flat at RM1.2b, while net profit increased by 18% to RM277m. Despite the increases, the results were very much below expectations as 9MFY12 net profits formed only 68% and 60% of ours and the street’s full year estimates. As the group had not secured any new FPSO contracts year-to-date, we believe it may be hard to meet the street’s expectation of two FPSO wins (and our projection of just one win) in 2012.
Segmental review
During the quarter, FPSO revenue increased by 11% QoQ to RM191m, attributable to sustained high uptime for its fleet and day-rate increase on Armada Perksa. OSV revenue increased by 25.4% QoQ to RM153m, on higher utilization rate (3Q12: 87%; 2Q12: 82%) and increased fleet tonnage (Armada Tuah 107, Armada Tuah 301 and Armada 302). T&I (Transport and Installation) revenue increased by 29% YoY to RM118m due to contribution from the LukOil contract and charter hire with Momentum Engineering secured by Amada Installer.
RM5.6m FX loss
Despite the higher revenue in almost all its business segments, EBITDA margin fell to 52% in 3Q12 (2Q12: 63%), largely due to RM5.6m of FX losses on translation and derivatives (2Q12: RM9.6m of FX gains). This arose as its charter contracts are typically denominated in USD and any unsettled balances at quarter-end would be translated into the reporting currency using the prevailing rate, resulting in unrealized fx gains or losses.
FPSO contracts to come in 2013?
We adjusted our model for 3Q results, but kept our FY13F estimates largely unchanged. In view of the global uncertainty, we believe our projection of one FPSO win per year for FY13-14F is conservative (versus the street's expectation of two wins per year). As we roll forward our estimates for FY13F, our fair value estimate rises slightly to RM3.48 (previously RM3.36), still on 20x PER. Maintain HOLD.
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