THE BUZZ
Yesterday, Bumi Armada announced that its subsidiary, Bumi
Armada Navigation SB has been awarded a contract for the provision of one DP2 accommodation workboat from
Tecnologías Relacionadas con Energía y Servicios Especializados, S.A. de C.V, a
Mexican O&G services company with interests in drilling, vessel chartering
and accommodation services in Mexico. This workboat will be providing both accommodation
and offshore support services in the Mexican territorial waters. The value of
the contract is about USD65m for a period of 5 years, with the option to extend
for another 5 years.
OUR TAKE
Contract will be serviced by Armada Firman 3. The Armada
Firman 3 is a 75m long vessel equipped with DP2 technology. The vessel also has
600 sqm of deck space and a 40-tonne single wire line deck crane for
maintenance and installation activities.
Positive news but no
change to our FY12-FY13 earnings. This is because the contract value
is relatively immaterial if we were to distribute it
evenly across 5 years (USD13m/year or RM40m/year). This amount only
contributes to about 1-2% of its total revenue p.a. In contrast, the bread and
butter of the company still lies with its FPSO division, which contribute more
than 50% to its total revenue.
Maintain Neutral.
Our fair value for Bumi Armada remains unchanged at RM4.37 based on
sum-of-the-parts valuation. We like the company for its ability to provide
one-stop solutions, starting from the O&G exploration stage to the
decommissioning phase.
Source: OSK188
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