CEO Morning Brief

Bumi Armada May Secure TotalEnergies’ FPSO Award in 2023, Says CGS-CIMB

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Publish date: Tue, 28 Feb 2023, 08:47 AM
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TheEdge CEO Morning Brief
Bumi Armada may secure TotalEnergies’ FPSO award in 2023, says CGS-CIMB

KUALA LUMPUR (Feb 27): CGS-CIMB Securities has maintained its “add” rating on Bumi Armada Bhd (BAB) at 59.5 sen with a higher target price (TP) of 69 sen (from 57 sen), and said BAB’s FY2022 core net profit of RM903 million was 14% ahead of the house forecast (in line with the Bloomberg consensus), likely because of good uptime at its floating production storage and offloading (FPSO) vessels.

In a note on Monday (Feb 27), the research house said BAB can also look forward to being potentially awarded TotalEnergies’ FPSO Cameia EPCC project sometime this year, as BAB is in pole position to win the contract, citing industry newspaper Upstream.

“This is a potential rerating catalyst. BAB will not own the asset, hence the risk of a rights issue is minimal, in our view.

“The FPSO Cameia is being tendered by TotalEnergies as a pure EPCC project, which means that BAB will only be providing project management, construction and execution services and hence will not have to invest in ownership.

“Downside risks include a potential rights issue, should BAB win a separate large FPSO project on a build-own-lease basis,” it said.

Source: TheEdge - 28 Feb 2023

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