Top up Armada @RM 0.37, there is no logical reason a company producing so much positive operating cash flow each quarter but its share price is at such attractive valuations . Armada is the flagship in my portfolio.

NatsukoMishim, since you are so pessimistic of Harta, why bother to stick around here ?

Want to understand how Gas Malaysia builds its strength ? Read ARs for the last 10 years before any one shout "Short 9 e" ; clowns shouts for nothing but for jokes

With very strong cash flow and healthy profit and rising ROE every quarter plus long term contracts in the midst of rising oil price hence happy clients; got rid of money loosing OSVs hence very little chance of further surprise impairment. Armada is in good shape to pare down its debt very fast , next few quarters would be very stable. Claire is slated to be monetized and the new JV FPSO would be out soon

Armada at current price and PE of 4 has better values than Yinson though the later has dividend but at 1.23 % only .

Well said ! NikiCheong for "Yes, true, but higher oil price environments means three things:

1) Lower likelihood of operators defaulting on payment and/or terminating the contract prematurely due to cashflow and/or yield issues
2) Higher likelihood of contract extensions being negotiated and exercised as it becomes more cost effective to extend the life of existing producing assets by drilling new wells and tying back new fields
3) Higher number of sanctioned projects, meaning more opportunities for FPSO operators such as Bumi Armada to get new contracts "

Thank You for sharing your solid reasoning once again .

It is typical of weak retail investors who do not understand the fundamentals of a particular counter and yet not interested to do home work to know their invested counters well enough to hold when the market goes into panic mood. Armada is one counter that is perhaps very misunderstood by such group. Its profitability is based on long term contract performance of its FPSOs, as well said by Sikusiku too. Those who choose to all in or all out at the whim and fancy mood swings are actually gambling, sometimes successful but mostly flying blind....

Starts to move up again , congratulations to those who bought low and hold

There is some logic in KingKong Doll's logic , super profit attracts fast and eventual over investment in a sector like what happened to the glove industry but not every sector has the same start up time frame . Oil and Gas sector is more complicated than glove manufacturing from exploration to eventual production. It would take years ( 5-7 years ? ) from exploration to production in the new oil fields. Hibiscus' Marigold oil field is an example. Hibiscus' strategy of buying brown field is a fast forward strategy and it seems the management is good at that at right timing and price more so for strategic move to get more gas production in its portfolio.

Even fund managers need to follow some kind of heard mentality due to their very own fund investors' mood swings for a particular sector. Glove stock's wild swing was another big example.

JohsuaMS7, have you ever heard of market sentiments and market operators manipulating and cashing in the mood swings of the retail investors or even the fund mangers ? Winmal has commented the same on the recent plantation stock price odd reactions in his posting yesterday.

JohsuaMS7 , Armada achieves historic record high PAT of RM 574 Min FY 21 not because of the increase in oil price but its good FPSOs operational performance in the year. You can read its quarterly reports to understand better.

One cant compare Armada with glove stocks, the glove manufacturers share price were very inflated within short spell of time due to Covid driven demand hence its ASP of gloves with surging super profit. Armada business is based on long gestation period FPSO projects/ contract plus recently disposed off OMV business. Its share price has risen in the last 2 years from record low of 11 sens to recent height of 57 sens basically due to the successful turn around by the new MD managed to stabilize its FPSOs performance ( especially Kraken) ; monetizing its money loosing OSVs asset and generate enough operating cash flows to cut down it high debt hence its financial costs. ( with its strings of prior huge impairments a few years in the row) Its recent share price height of 57 sens is still very far from its highest share price of around RM 2.70 in April 2012. Armada is a success turn around story yet fully recognized by the overall market as not all retail share buyers are fully aware or buy in the key success factors of its turnaround . I guess many retail traders are more inclined on hear says than knowing the details of its turn around for their decisions , hence tend to jump on share price changes , pardon me for saying this. We cant not discount there market operator play on this weakness to make killing a few rounds already, is this another round of killing the Ikan Bilis ?

Of course a short term trader would not buy such logic but fears price swing .

Another way to see its attractiveness is that Armada is generating operating cashflow of 23 sens /share in FY 21 and we pay currently 36.5 sens to buy it !

It is logical to see Armada is expected to earn even more in FY 21 and beyond given its decreasing financial costs and depreciation costs in FY 22 and beyond. Its joint venture FPSO is expected to be ready in the second half of 2022 .

Armada with PAT of RM 574 million (9.75 sens EPS ) plus Net Cash Flow from Operating Activities at RM 1.36 billion in FY 21 , it is very attractive with EPS of less than 4 . It is expected to earn more given it has sold most of the money loosing OSVs in FY 21, hence why panic when its share price dropped to 36.5 sens ? It business model is not immediately affected by the rise and fall of the oil price as it is based on long term contract in it FPSO business.
I added a batch today at 39.5 sens and would add more if it falls below 35 sens .

Added more on Armada as the current price of 41.5- 43 range sens is attractive. Expect Armada's profit to grow next few years as it continues to pare down its debt and have successfully monetized its non performing OSVs. Will add more if it moves further down. asit cant go too wrong with its PE of about 4 , long term business contract , high EBITDA % and strong free cash flow.

One wonders if BA is taking some fixed rate loans or variable rates with its total short and long term loan at RM 7.4 billions and for every 1 % rise of interests means RM 74 millions additional interests. However at its current profit level, it is still sustainable though.

Yes Robert, you are right it can be futile to tell a typical share trader the rationale of long term investing in Armada , even a10 % profits are irresistible to them for not taking taking off the table. Armada valuations are indeed too low at current price and syndicates are lurking to kill the small fishes for bigger catch.

Armada is in long term contract FPSO rental and operate business, though it’s customers would be happy with high oil price but oil price has no direct and fast effect on Armada’s profit. Its profit is very dependent on its existing FPSO performance up to marks, leading to strong cash flow to pay down its loans fast. Every million $ loan interest saved from is an extra million $ earned. Meanwhile its incoming new FPSO would give Armada another boost. 60 sen Armada’s share price is within sight given its eps is likely more than 10 sens soon. Armada’s 70-80 sens TP next FY can be realistic .

@ Thirai Thiraviam While the TTM earnings of BAB is encouraging, the company remains saddled with a huge debt, with an interest coverage of only 2.4
02/12/2021 11:05 PM
Interest Cover of 2.4 is not too low and it also depend on if you derived the figures using EBIT or EBITDA. The management is cashing on its less productive OSVs and once its is done, it would improve both profits and cut down the debt level even faster. Armada has passed it worst debt situations 7 quarters ago and continue to improve further. Its strong cash flows from operations is impressively stable enough to meet its debts obligations.

Some share traders or short sellers tend to talk down the share price hoping to buy low by causing uneasiness in other shareholders. I find Armada's cash flow of about 1.5 times of its rolling 4 qtrs EPS is assuring. It means the Company would not be cash strapped and go bankrupt. Its FPSO contracts are long term , visibility of its long term earnings are quite good albeit increasing progressively. Wait till its Share Capital Reserves turned to positive next FY then it is allowed to pay dividend if approved by management and shareholders. Meanwhile we need to wait for the ONGC FPSO coming onstream for significant revenue and hopefully profit growth. Next FY would be very exciting for Armada shareholders.

Good values at 43 Sens, I added some 2 days ago. No point keep talking share price but ignore the fundamental values of Armada that produces strong cash flows beyond its EPS of 10 Sens per year. Market will have to recognize that eventually when its negative share reserves become positive in FY 2022 at this rate of profitability. Its ROE of 19 % is very attractive.

Oil supply now cant cope with the demands not only because of the world recovers from Covid 19 lately but also due to low level of investments in new oil field developments for years. To meet environmental protection requirements , many power plants are also shifting to oil and gas mode instead of coals. Many USA Shale oil industry players have stopped operations in the last few years when oil price went below $60 /barrel . Bidon's policy is also not in favor of encouraging shale oil production due to environmental concerns.

In short, oil prices would remain high for sometime unless world economic situations are down due to resurging Covid 19 in western countries again.

@i3lurker "Global oil price is a risk factor alpha for Armada.

at low oil prices, rentals can be terminated just like Woodside. For companies with huge fixed costs it means bankruptcy immediately.

at high oil prices, lessors treat Armada like gold. Zero risks of rental terminations.

How hedge funds aka sharks view Armada is purely oil prices and nothing else.

Schoolboys already know its fixed rentals, no need to mention and not worth saying.

People are more concerned with risks of Armada bankruptcy resulting from low oil prices.
20/11/2021 9:42 AM"


When I wrote " Armada profitability through its long term contracts with its customers are less directly and immediately affected by oil price fluctuations ."
It means short term oil price fluctuations within certain magnitude .

Any sensible investor can use own common sense to judge if the magnitude of the oil price fluctuations and its durations are big enough to be a real threat to Armada business model.

"Less directly and immediately affected by oil " means exactly that. Armada profitability is less immediately and less affected by oil price fluctuations than to Hibiscus for example.

Any business would face the risks of eventual termination of contracts if customers are loosing money for long time.

When oil price price dropped to very low in April last year, not many Armada customers terminate FPSO contracts. One Woodside contract termination may not represent the real inherent risks of its business model. All business face some risks though.

It is simple enough to understand, I trust for any common sense investor. ( Perhaps for any investor above school children level, but I am not saying this just to get even for jeering purpose )

Talking about Armada facing bankrupt risk now ? It is already 7 quarters too late when its debt to equity ratio has dropped from 3.27 in Q1 2020 to 1.96 in Q3 2021. The last two years of operating cash flow / operating profit for Armada are 1.5 and 1.59 are already very reassuring.

Still want to play safe ? Divest to EPF savings and sleep well.
20/11/2021 1:35 PM

Armada profitability through its long term contracts with its customers are less directly and immediately affected by oil price fluctuations . Its operational profitability is determined by its FPSO availability and OMS utilisation rates. Its net cash flows generated from its operating activities are strong and is more than its profitability, hence it reflects the real true value its share valuations. To me the impairments are fast forwarding it’s PPE depreciations to meet accounting standards . It means faster profitability in coming years . Once’s its negative reserves are eliminated in FY 23 (?) at its current rate of quarterly profitability , we can expect some dividend in perhaps . Share traders likely can’t wait and won’t like waiting that long . For value investors, a P/E of around 5 with steadying track record of improvements Armada share price seems cheap. Its ROE around 20 of late is getting attractive too.

These are my personal assessment of its values and humble opinion just for sharing. You may think otherwise and invest or divest at your own discretions.

FY 21 EPS of 10 sens is within reach . Nice quarterly results. Next Qtrly results would be better should another 4 OMS are to be sold off and FPSO Kraken backs to normal. Current share price is too low for its earning potential.

Talking about P/B ratio, Takaful is at its 5 years low of 2.08 compares to its 5 years high of 4.68 , so what is the fear of MRS 17 reduces its book value ? This is another good time to buy a fundamentally strong shares of ROE mid to high 20s for the last 5 years. Takaful is a market leader in Islamic insurance in Malaysia. Potential is huge. The company would not collapse because its good CEO is leaving.

@ value_seeker Hibiscus good company. Armada is also a good company.

Yes I agree both are good investment in different ways.

Armada is a progressively turnaround story after the new MD takes charge to address the pressing issues of Kraken operational issues, aggressive sell off the idled OSVs; paring down of the debt. Armada reports are not as detailed as Hibiscus. This need some guessing on each FPSO actual operational details. Not helpful enough to restore its true values of the stock valuations.
Armada operation profit is less dependent on the oil price fluctuations than Hibiscus due to its long term contract business of its FPSOs.

Hibiscus is aggressively growing through acquisition of Repsol and continue investing to maintain or enhance in its existing brown fields to productively generating cash flow. Its financial situations are strong and the management style is more transparent than Armada in terms of reports and clearly demonstrating it is pursuing its long term strategic goals. It is more communicative than Armada to make investors understand better. Its stock valuations are much more dependent on oil price than Armada.

We do not deserve any jeering from any lucky or boastful trader of Hibiscus stock after making mere RM 15 k as if none of us also invest in Hibiscus share too.

We welcome constructive humble sharing of positive or even negative information here.

Cash rich and good management track record, wont go bust overnight. Very tempted to add more holding .

Narcissist he is , agreed

Indianajones, you can boast your success in Hibiscus trading at Hibiscus forum but you ought to discern what is jeering versus giving good intentional advise to Armada investors. There are many successful and bigger investors investing in both shares without jeering others through self trumpeting. Big deals for making some money in Hibiscus ? All good for you but dont boast and jeering us here too much for ego sake; it only lower yourself in our eyes.

We have seen enough people like you before, now they are mostly gone for good from here. You are welcome to give constructive advise with respect to to others and learn from each other.

After the last few days of dropping prices , some weaker holders of Armada have already sold, higher probability of more buyers coming in . If drop further I would consider to buy more to add onto my holding. Armada Stirling would be in FY22 revenue contribution .

Armada financial costs for the last 5 years was RM 2.1 billions while its EBIT was RM 2.3 billion in the same period. Another major profit killer is its impairment of RM4.4 billion over the last 5 years. Hence paring down of its debt withs its strong operating cash flow now and getting rid of the OSVs which are idle ; finally shutting down of OMV division are the top 2 priorities the new MD has done right. So Indianajones, if not assured enough as investors, buy more Hibiscus as you have proclaimed. I am happy with both at the moment.

To Indianajones who wrote "This view is full of "may and ifs". But the inflationary spiral is real looming in the actual economy now around the world. The world sees it as a looming risk . Your " may this and if that" does not help investor's consolidate perception at this moment "

My answer is everything has the cause and effect; nothing happen for no reasons. Armada or any business performance can be affected by happenings within the company operational and external factors. As investors one has to assess the probabilities of each event happening and its impacts. If any one can assure you it is going to happen 100 % or chop his head off if does not then would you be assured enough ? Please go on invest what you know is 100 %, for I see Armada has the strong cash flow to pare down its debt fast right now provided its cash generators , FPSO operations, continue to run smoothly at this rate. Meanwhile good luck to your Hibiscus, which I have also invested.

Armada operating cash flow is strong enough to pay down its debt by about RM 1 billion each year since FY 16 ( RM13.8 B) to FY20 ( RM 8.8 ), this is assuring enough. I guess Armada may get EPS of 10 sens in FY 21. The key thing to watch is the USA Government potential debt ceiling crisis and cash crunch in coming months that may tip the world economy over. However, Armada with its long term FPSO contract terms with clients, I still see Armada is potentially much less affected than many other Oil and Gas companies business wise should world economy face the set back ; especially if it manages to sell off all its OSVs soonest possible. Let us keep the faith though.

Long time never come , let the climax last long long ...

Waiting for the coming quarter to break RM 200 million profit after tax to see Armada TP rocket up. Hold on ....... no matter how syiok now.

Next quarter results may break RM 200 Millions, Armad share price would fly beyond 60 cents. Fingers crossed

Happy !

The major steps taken by management to sell off the money loosing OSVs, paring down the debt with the positive operating results and plenty of operating cash flow and steady FPSOs are running assuring. The interest and depreciations are reduced by RM 55- 60 M and 25 million respectively each year. It means profit before tax is potentially increasing by RM 75-80 Million pre year before any new growth of business. Armada has the potential of a multi bagger with its current low PE of about 5.44 plus the O&G sector is back to limelight due to world shortage of oil and gas , hence it is different from last year whereby Armada failed to break through the 50 cents barrier, I guess. Good luck and hold on tight. !
11/10/2021 8:45 AM

Next quarterly profit could possibly better than Qtr2 without impairment, lesser depreciations with more OSVs sold , less interest expense given its aggressive loan repayment lately. NOP may touches RM 200 million +, Armada would go beyond the 60 sens

An opportunity to collect more if it goes down further.With potnetial EPS of 9-10 cents this FY and good operationg cash flows paring down the outsnading loans fast, current share price is cheap.

Next few quarters would have minimum chance of impairments after this latest impairment given lesser remaining OSVs with rising charter % plus trending up oil prices. Year end EPS may even reach 10 sens and beyond.I do appreciate Nikicheaong's advice " dont be a slave to the stock" ( it also reminds me of Mabel similar cautions before) as I experienced the stock price swings often by market sentiments apart from the fundamentals. Armada is the largest investment in my share portfolio since 2015 and I did buy and sell some portions in between to cash in while stockp price rose or sell some portion when fears striked but later added back when testoterone runs high again.Not all the times I could get the price right in between but this stock has been rewarding to me. I am glad the Armada mgt has made good progress paring down the debt consistently with improving operating cash flows to reducing financial cost.Its ROE is improving as the consequence of reduced financial costs too. Next 2 quarter good results would boost the share price to 8 to 10 X EPS levelas I see Armada is heading towards safer water with its new Captain onboard. Good luck to Armada Investors. Those continue to spread negative views on this stock are prehaps pure traders who got their hand burnt most of the times I guess.

Thanks to Nikicheong for the sharing of so much information

FY 2021 1st quarterly EPS @ 2.77 sen is the highest since Q 2 FY 2014 which was announced on 24 August 2014. The share price then was at RM 2.04 before it plunged down further along with declining of EPS since.
Should the next 2- 3 quarter produce average EPS of 2.5 sens barring any surprise impairment ( should be less risks now given 16 OSVs were sold off the last 2 qtrs and rising oil price lately) ;it would not be far fatch to expec 80 sens to RM 1.00 share price . I stand to be corrected in the next 6- 9 months.
16/06/2021 1:19 PM

Potential eps 8-10 sens in FY 2021; at PE 10 Armada is worth 80 sens to $ 1.00 by end of financial year.

I am wondering why the planation segment of CBIP has been loosing money for the last 5 years even at high palm oil price now. As sharehoders we should sk the questions in AGM.

Expect good results in coming quaterly results ( next week ?) given Kraken has been doing well