Bumi Armada on track for record profit in FY24
PETALING JAYA: Bumi Armada Bhd can expect a sequential core net profit improvement in the fourth quarter of 2023 (4Q23) and a record-high core net profit of RM844mil in financial year 2024 (FY24).

Its core earnings improved to RM181mil in 3Q23 and the revised FY23 core net profit forecast implies a further sequential core net profit improvement in 4Q23 to RM210mil, back to status quo, said Maybank Investment Bank (Maybank IB) Research.

The research house has trimmed its FY23 to FY24 net profit forecast for Bumi Armada by minus 0.5% to minus 1.1% while leaving FY25 estimates unchanged.

This is to account for a delay in the recognition of a bareboat charter to April 2024 from end-November 2023 for its 30%-owned Armada Sterling V floating production storage and offloading (FPSO) vessel.

This was due to Oil & Natural Gas Corporation (ONGC) of India facing multiple delays in achieving first oil from its KG-DWN-98/2 block.

The research house understands the FPSO has already achieved hook-up and Bumi Armada is still waiting for ONGC to conduct the necessary acceptance tests.

MaybankIB Research’s revised earnings forecasts and target price (TP) for the oil and gas support services provider assume that final acceptance will be achieved in April 2024.

It adds that after rolling forward its base valuation year to FY24, its sum-of-parts based TP for Bumi Aramada is lowered to 65 sen from 71 sen. It however maintained its “buy’’ call on the stock.

The research house said key risks to its call include any unplanned shutdown for the company’s floating assets and a termination of any of its FPSO or floating storage unit leasing contracts.
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Bumi Armada Bhd can expect a sequential core net profit improvement in the fourth quarter of 2023 (4Q23) and a record-high core net profit of RM844mil in financial year 2024 (FY24).