THE BUZZ
Bumi Armada (BAB) announced on Bursa Malaysia yesterday that its subsidiaries have secured five contracts – one in Gabon, two in the Republic of Congo and two in Saudi Arabia – worth approximately RM147m, with an optional extension value of RM102m.
OUR TAKE
Accommodation workboat chartered to support Total Gabon’s offshore operations in Gabon. The contract in Gabon entails the charter of an accommodation workboat, namely Armada Firman 2 to Total Gabon (a Gabon-based company which is part of the Total SA group) worth approximately RM12m for an initial period of three months, with extension options of three periods of one month each for a further aggregated contract value of RM11m. The charter contract is the first for BAB in Gabon.
Bumi Armada (BAB) announced on Bursa Malaysia yesterday that its subsidiaries have secured five contracts – one in Gabon, two in the Republic of Congo and two in Saudi Arabia – worth approximately RM147m, with an optional extension value of RM102m.
OUR TAKE
Accommodation workboat chartered to support Total Gabon’s offshore operations in Gabon. The contract in Gabon entails the charter of an accommodation workboat, namely Armada Firman 2 to Total Gabon (a Gabon-based company which is part of the Total SA group) worth approximately RM12m for an initial period of three months, with extension options of three periods of one month each for a further aggregated contract value of RM11m. The charter contract is the first for BAB in Gabon.
Two contracts for deployment in Congo. BAB secured another contract from ENI, the ltalian national oil company, for the charter of an anchor handling towing support vessel (AHTS), namely Armada Tuah 82, which is expected to be deployed off the shores of the Republic of Congo in the first week of Dec 2012. The contract, worth approximately RM36m, is for a period of two years with two optional extension periods of one year each for a further aggregated contract value of RM35m. The other contract from Diamond S.A is for the charter of an accommodation work barge, namely Armada Hibiscus, worth RM56m for a period of two years with extension options of two periods of one year each for a further aggregated contract value of RM56m.
Two contracts for deployment in the Arabian Gulf/Red Sea. BAB also secured two contracts from Rawabi Swiber Offshore Marine (Singapore-based JV company between Rawabi Holdings and Swiber Holdings) for the charter of an anchor handling towing support vessel (AHTS) each, namely Armada Tuah 84 and Armada Tuah 85, to operate within the Saudi Arabian waters in the Arabian Gulf or Red Sea. The contracts are worth approximately RM43m for a period of one year each.
Positive for FY12 and FY13 earnings. We are taking the opportunity to raise our FY12 and FY13 earnings forecasts by 3.1% and 11.5% respectively to incorporate the higher potential earnings from its offshore support vessel (OSV) division. We are forecasting a
net profit of RM402.3m in FY12 and RM543.1m in FY13.
Maintain BUY. In line with our timely upgrade from a NEUTRAL to a BUY yesterday, we are convinced that FY13 will be a good year for the group if it is able to sustain the momentum in securing new contracts. Our FV is revised upwards from RM4.15 to RM4.35, based on our sum-of-parts valuation due to our earnings revision. The stock currently trades at 19.9x FY13 earnings, which we think is attractive. That said, we are still concerned with the likelihood of major shareholders paring down their stakes in the group in the near term.
Two contracts for deployment in the Arabian Gulf/Red Sea. BAB also secured two contracts from Rawabi Swiber Offshore Marine (Singapore-based JV company between Rawabi Holdings and Swiber Holdings) for the charter of an anchor handling towing support vessel (AHTS) each, namely Armada Tuah 84 and Armada Tuah 85, to operate within the Saudi Arabian waters in the Arabian Gulf or Red Sea. The contracts are worth approximately RM43m for a period of one year each.
Positive for FY12 and FY13 earnings. We are taking the opportunity to raise our FY12 and FY13 earnings forecasts by 3.1% and 11.5% respectively to incorporate the higher potential earnings from its offshore support vessel (OSV) division. We are forecasting a
net profit of RM402.3m in FY12 and RM543.1m in FY13.
Maintain BUY. In line with our timely upgrade from a NEUTRAL to a BUY yesterday, we are convinced that FY13 will be a good year for the group if it is able to sustain the momentum in securing new contracts. Our FV is revised upwards from RM4.15 to RM4.35, based on our sum-of-parts valuation due to our earnings revision. The stock currently trades at 19.9x FY13 earnings, which we think is attractive. That said, we are still concerned with the likelihood of major shareholders paring down their stakes in the group in the near term.
Source: OSK
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