- We maintain BUY on Bumi Armada, with an unchanged sum-of-parts-based
fair value of RM5.05/share, which implies an FY12F PE of 26x.
- The group has expanded its anchor handling tug supply (AHTS)
vessel fleet by two to 27 vessels. Overall,
the group’s total fleet, including accommodation workboats, supply,
utility and other support vessels, has risen to 45.
- The two AHTS, which were designed and built in Japan in 2009,
have deepwater capacity of 12,000 brake horse power (bhp). Both were acquired
from Japan’s Sanko Steamship, which is currently struggling financially.
- The 68 metre-long vessels have DP (dynamic positioning) 2
capability with 150-tonne bollard pull and can accommodate 30 personnel/vessel.
The price of purchase for the two AHTS, which will be renamed Armada Tuah 107 and
Armada 108, have not been disclosed due to competitive reasons.
- But we understand that the acquisition price was
attractive due to the vendor’s financial distress. Based on the net book value
of Armada Tuah 105, which was built in 2009 with a capacity of 12,000bhp, we
estimate that the price of each vessel could be below RM90mil (US$29mil), which
is likely to be funded from external borrowings.
- The two vessels have not secured any charter yet but the announcement
indicated that they will be deployed for deepwater activities in Asia, West
Africa and Latin America.
- These acquisitions are not a surprise, as we had already highlighted
them in our past reports. But the two new vessels will not have a significant
impact on the group’s earnings. Hence, we maintain our FY12F-FY14F net profits.
- Besides these two AHTS, the group is on the prowl to acquire
additional platform supply vessels and accommodation work boats, given its
tightening asset utilisation rates, almost at 100%. This also supports our view
that marine charter operations for the industry are reaching an inflection
point, which will lead to a significant increase in charter rates in
2H2012.
- We continue to like the stock due to the following
re-rating catalysts:- (1) Likelihood of new floating production storage and
offloading (FPSO) vessel contracts as oil & gas developments reignite
globally, (2) tightening vessel utilisation rates, and (3) premium scarcity for
oil & gas stocks with large market capitalisation.
- The stock currently trades at an attractive FY12F PE of
21x compared with SapuraCrest Petroleum’s peak of 29x in 2007.
Source: AmeSecurities
No comments:
Post a Comment