# Rohan, yes, it is still good to pay down the debt as much and wait till the accumulated losses of owner equity are eliminated. Reducing the debt is equivalent to growing the company' net profitability through the interest costs savings and reduce impacts of interest rate changes. Psychologically the market perhaps needs a boost for a " maiden " dividend from Armada, since the last one in 2015.

While we may applaud the prudence in the paying down of the loans aggressively by Armada management ,we should not accept the negligence in preventive maintenance or lack of redundancy in crucial system on Kraken. The MD should take a pay cut for lack of foresights in ensuring no production disruption in such an important asset. This costs the shareholders hundreds of million. He simply ignores the need for timely updates with shareholders as well.
Is the market still reflecting lack of confidence in Armada’s leadership despite the strong free cash flow that should give Armada stock better valuations? We can’t rule out AK may take Armada private once again if it is valued too cheap after its debt is paid down. I hope my such fear is unfounded.

@ Nikicheong, yes it can also be beneficial to investor if Armada management can make use of the future free cash flow to generate high ROE in the new investments instead of distribute the cash as dividends. The latest Kraken event and lack of timely updates subsequently does not help create trusts.
Dividends may help gaining some interests among sceptical investors who want to see some cash returns sooner instead of waiting in some blur visions due to poor investors relationship management by Armada.

It would take another 2 quarters profitability to remove the accumulated losses of the owners' equity (- RM 447 K ) before Armada is allowed to declare any dividend from its future profit. The market would accept its valuations better than now, I hope.

Reply @ NikiCheong
"Big guns buying or insiders know something's up."
Heard of some news on this from any source ?

Time for a step up of price , Armada, long overdue .

Robert and Nikie, thanks for your interpretations of the UOB's comments on the ICOP which I find it perplexing as if BA management is so laxed, for such matter of great concerns. The lack of update during Kraken's shut in has reduced my confidence of BA current management, to say the least. These few days the BA share price was on the retreat, it can be a good opportunity for some further accumulation if it goes down further , though I am concerned for BA's lack of new projects while some existing contracts are up for contract extension.

Can anybody who has knowledge of FPSO comment on the concerns indicated by UOB on the Kraken's Infrastructure Code of Practice shows all processing equipment were expected to reach ullage from 2023 . The BA management has no clear plan to perform diagnosis on the entire top side equipment to reduce surprise breakdowns once again.

The lack of update on Kraken during the shut in period from Bumi Armada Management have negative impact of my trust of them greatly. However, I have added more Bumi Armad shares during the during the crisis based on Bumi Armada business model and the strong free cash flow of the business in the last few years. It is still the flagship in my share investment portfolio.

Why bother arguing who really makes money or go bankrupt incessantly? Just make up your mind if you are a pure trader or long term investor or a hybrid investor how sometimes take profit partially when the price is deemed alright to you. No one can forever boast all the time 100 % accurate in buying or selling shares at the right price. I remember there was a person who is called Investor King used to announce he makes good money trading Armada in this forum almost a few times each week . Now I don't see him in this forum; I wonder if he gave up trading Armada shares already?

The current NTA of Armada is 89 sens/share ; its current share price of 49 sens provides about 45 % discount. For an asset that produce so much cash flow each quarter, it is very attractive. Profit is desirable but its Net Operating Cash Flow higher than profitability is even more valuable.

Not all earning are with some cash flow. Armada net operating cash flow after loan interest is about RM 1 billion per year but with a market capitalization of RM 2.8 billions is very attractive. The market confidence in management has certainly taken some beatings due to the poor handling of keeping the investors informed progressively.

@ NikiCheong "After the recent purchases, my average is now RM0.295. Prior to that it was RM0.262. I have been forced to "average up" each time. My original buy back in October 2020 was 350k at 22.5 sen "
17 minutes ago
Hi Niki
Did you ever trade Armada shares in between Oct 2020 till now or you just keep adding when the prices moved ? If you did sell some of Armada shares holding then did you deduct the profit you made from the sales to offset your overall invested costs in Armada share to arrive at your average cost of existing holding ?

https://pinpoint-insights.com/interx/tracker?op=click&id=1c07f.1aee&url=https%3A%2F%2Fresearch.rhbtradesmart.com%2Fdownload.php%3Ffile%3D616886152257091264937bbca8598&_hC=CEEC5253

RHB analyst reports on 23 June
 Keep BUY and SOP-based TP of MYR0.73, 51% upside. We are longterm positive on Bumi Armada’s MoU with Navigator Holdings – this could
potentially generate a new source of income for the former as it embarks on
a global energy transition agenda. Our call is still premised on the
assumption that the Kraken shutdown will be resolved in the short term.
 To provide CO2 solutions. BAB announced the signing of a non-binding
MoU with Navigator Holdings, the owner and operator of the world’s largest
fleet of handysize liquefied gas carriers, to establish a JV company (to be
owned equally) to provide CO2 shipping and injection solutions in the UK.
The JV is looking to design and implement a value chain of shuttle tankers
delivering to a floating carbon storage & injection unit. It is estimated that
the potential market in the UK is over 30m tonnes of CO2 pa from emitters
that are not proximate to the existing awarded carbon capture, usage and
storage clusters. Both parties are in initial discussions with a number of
emitters, and if successful, the first shipment of CO2 is anticipated to take
place three years after taking the final investment decision.
 Minimal earnings impact for now. Overall, we are long-term positive on
the venture – this could potentially generate a new source of income for
BAB as it embarks on a global energy transition agenda. It was stated that
the company operates the only FPSO which uses an amine recovery
system to extract hydrogen sulphide (H2S) from production gas, similar to
what is used in many of the CO2 capture-recovery systems worldwide.
However, pending further details from management, near-term earnings
impact is likely to be minimal, and funding requirement would depend on
the size of the project pipeline. As such, we maintain our earnings
estimates.
 Kraken status. Separately, BAB announced that following the recent startup of the Kraken FPSO, production is currently at c.60% of pre-shutdown
level. There is still further work, testing and investigations ongoing to
stabilise and bring the vessel’s operational performance back to preshutdown level. According to upstream, the UK’s Health & Safety Executive
(HSE) is examining the circumstances that led to the shutdown. It was also
reported that only one of the four hydraulic submersible pumps (HSPs) is
available for use, while the other three need to be replaced. Note that
Armada Kraken accounted for >30% of our valuation and any long-term
disruption would present a downside risk to our TP, which implies FY24F
P/E and P/BV of 5.4x (below its 5-year mean of 6x) and 0.6x (below +1SD
from its 5-year mean). It also incorporates of a 6% ESG discount, based on
our ESG score of 2.7.
 Downside risks: Contract cancellations, failure to win new contracts, and
a further deterioration in Armada Kraken’s operation

Well done Niki and SSlee also. Thanks for your letter to Bursa on this matter.

Yes I agree with you Robert, Gary , the MD of Bumi Armada is showing poor leadership in this FPSO Kraken's transformer issue management for failing to keep investors updated on the progress of sorting out this issue weeks after the initial announcement. It appears Armada has no respects for the investors' need of clarity on what is going on in FPSO Kraken. Either Bumi Armada has very poor investor relationship management or deliberate holding back of information for some agendas?

Fear mongering and panic reinforce each other in market spiraling down leading to under valuation.

Bumi Armada is 1 stock that is quite complicated for general investors to comprehend its nature of long investment cycles, long term contract and its inherent risks in its operational complexity. This latest hiccup after the nearly perfect track records of FPSO Kraken's uptime in the last 3 years still bring back some guessing worse than actual situations. Many investors are sitting on the edge the last 2 weeks or so.

Price moves sideways for sometimes can also mean there is some support at this level, provides us the time to collect slowly instead of all in 1 shot.

Thanks Niki for sharing your research and always helpful to many.

@Robert Water
Thank for your clarifications.

It is more assuring to stare at your own crystal balls even if someone can bang their hairy chests telling you potential Armada share price by next week. Kraken is not sinking yet but an FPSO with a transformer issue.

@ Robert Walter posting "

1. Transformers were running hot so people kept door open, and some posters peeled off the wall due to being warped by heat
2. There was an annoying buzzing sound and clicking, much louder than in the other electrical rooms
3. You could sense the sour 'transformer' smell closer to the units. By the vents of the transformer enclosure, you could nearly taste it, not just smell.
4. During pump switching smoke was observed
5. One transformer failed but nothing was done about it. 'One off event,' they said.
6. Eventually an operator expressed his concern about critical equipment health. Unit started to give trouble and malfunction warning light. Manager asked him what he was planning to do about it. And he said meeting was for productive discussion, not for complaining. The guy learnt to keep quiet.
Based on the above , we need big tummies to contain the worries of Bumi Armada's lack of update of Kraken hiccup .
Robert, can you please clarify where do you get the information of transformers situations ?
Thanks

Peter Lynch once wrote the ultimate success or failure of investment is not purely dependent on one's intelligence but the also the stomach to withstand the worries of the world long enough for the investment to succeed. The skittish investors no matter how intelligent always got flushed out the market by the brush beater of the doom. To me it is quite difficult to overcome the worries at times but very true and useful so far in Armada stock . I am not impressed by the ways Armada management handling the information flow to the investors on the latest Kraken hiccup so far. Either they willfully hold back the updates or they do not know how to handle it confidently. This is harmful to investors' confidence in Bumi Armada. Is this the agenda of the insider large shareholders for holding back updates so far and SEC should investigate ?

Add another batch @ 45 sens

market moving today

Niki, thanks for sharing the great news.

I understand there are 4 wholly owned and 3 jointly owned FPSOs in Bumi Armada fleet; though Kraken is important in the revenue generation contributing to about 30 % revenue but I cant imagine how a pump/transformer issue on Kraken can be deemed as a potential game over matter for Armada in the worst case scenario. Further more the transformer is accessible outside the well as I heard from this forum. Does it needs 6 months to replace a transformer ?

Thanks to I3 Investor management stopping the noisy Mouse from causing further nuisance in this forum. This forum is now back what it should be : Good information and opinions sharing instead of flooded by incessant insults among a few nonsense participants. Cheers!

History seems to repeat itself of Armada up and downs over the years; though it is frustrating to see the price dropped so suddenly but I do take some solace from my earlier " dividend aimed" disposals of about 45 % of my Armada total holding in batches with about 57 sens average . I did regret for selling a little too early when Armada eventually hit 72 sens weeks later. Now I am buying back in batches as Armada price dropped lately. It can be a little unnerving as the price keep dropping as its price further dropped after adding but it also means further opportunities to add further for a counter I see values in its business model and at such a cheap valuations. Its cash generation track records for the last 3 years is the cornerstone of my faith in Armada and with PE @ 3.5 , it is a steal. I am waiting for it to go up or down, either way I am excited. You can decide if this suits you. The market is panicking a little too much as it is swinging according to flow of the flocks.

Top up another 10 % versus my total holding of Armada @ 44 sens, this batch was parked waiting for the last 5 days. Will add more if it drops further to below 40 sens.

Can all please stop excessive unnecessary insulting arguments in this forum. We are here to share honest opinions to make money investing in Armada instead of attacking each other with childish statement. If you wish to argue on other counter please do it in the relevant forums. We cant destroy this forum with excessive flooding of such attacking and counter attacks among 2-4 participants. Please have some respects for each others.

I take this this hiccup that can happen as the inherent operational risks of an FPSO ; it is not the end of the Kraken nor Bumi Armada but possibly an opportunity to accumulate again. The market is probably panicking too much.

For any investor if a stock is deemed not worth investing , the person would stop investing and go somewhere else where there is money to be made instead of so busy keep posting his / her expert opinions so often how bad is the stock in questions. Although a different opinion is acceptable from time to time based on rationale explanations but not a repetitive nonsensical statements. One is either with bad motives behind these repetitive attempts to talk down a stock by spreading unfounded fears or some phycological needs for attentions, more so if the person appear in various forums doing the same. Yes, I choose to ignore such characters most of the time except annoyed the forum can be overwhelmed with rat shits all over the place.

John Chew used to talk nonsense a few years ago when Armada price was down he kept talking down Armada. He was told off many times one day Tsunami of Armada would sweep him up hanging on coconut trees. So when Armada reached 70 plus sens , we notice John Chew disappeared but emerged as Mouse on this chat again. This speaks volume of the nonsense talking John and then now Mickey Mouse. Remember when the rat is running across the streets making noise, the public would hit it hard. Just wait Armada recovers when the market Tsunami swings up again, Mickey Mouse suddenly found he is naked hanging up the tree to dry again. Meanwhile, we still buy ticket to go on board Armada for grand cruise.

Robert, thanks for your good information sharing and I find it succinct enough but not too complicated for me so far.

Thanks Mabel for exposing this nonsense Mickey Mouse was under another name of John Chew. ( “ John Chew” antagonised too many others then with the same non sensible postings. ) Just beware of anyone who needs to keep changing name to hide his unpopularity for speaking nonsense in any forum as less and less participants would heed what he has to say eventually.

No one can buy or sell at best market price all the time, market sentiments are weak hence Armada Kraken's hiccup may be interpreted more serious than if the market is in bull run. Too many people are sitting on the edge at the moment due to generally weak market sentiments. Sharks are lurking for people jumping off the boat.

Just accumulate in batches as the price fluctuates, as a means of averaging the risks

I added Armada this morning @ 48 sens . Thanks to those who contribute much insights on how the FPSO works and technical explanation of possible technical scenarios of the break downs. I am still convinced of the strong fundamentals of Armada and this incident is not going to sink the whole operations but part and parcel of oil and gas sector risks, one has to stomach it from time to time. Armada valuations is too low for its net operation cash flow for now at least,

Reply Mabel
" Great MM78 and Bon888! "
Trying to get some bargains when market is fearful but only at those counters I am familiar with their fundamentals. 😊 Good Luck to all who try.

Yes buy batch by batch and if aggressive at bigger volume at lower price. Not all in at once. Lessons learnt long time ago.

waiting to buy more if it dropped to 47 sens

All is not loss as Armada is taking the Kraken Shut in to do necessary maintenance as well; bought some @ 50 sens just now.

From the annual report FY 2022 , it seems Takaful is very aggressively growing the business. The profit before tax is better than FY 2021 but profit after tax is affected by extra tax by the one time Prosperity Tax

Armada could not afford to keep the money bleeding OSVs for the last few years, given its high debt. The impairments due to idled OSVs would have caused impairment each year. The idle OSV were becoming cancerous for the company before they were sold off. Armada could not have pared off the debt as fast if the OSVs were not sold off.

Armada is not as good as Hibiscus in making detailed information available to the investors but mainly in big paint brush styles. The later explains its operational and strategic information with far more details than Armada. This hinders the price supports for Armada.

Vincent8864 wrote "Just ignore him, you stop replying all his messages. Let him talk to himself. Skip reading all his posts"

I agree with you, Vincent , just ignore Jerichomy's non sensible comments and dont response at all, he may fade away like those behave the same here before.

Chanahmun77,
I totally agree it is not so straight forward for the board to decide dividend matter given it still have big bank loans to pay. I am more for Armada is finally allow to issue dividend once its accumulated losses /profit reserve become positive. At that juncture it may attract fund managers' interest hence may help to lift its market valuations better. I also see it is imperative for Armada continue reducing its debts given current world financial uncertainties to cut the risks of high finance costs and put itself in good position to fund next potential project without right issue. We can get some dividends sometimes through swing trades while hold our core holdings for final harvest at right PEs.