Please sell more to us @0.315 ☺️

Sure, let's see where we'll be at after Q3 is released end Nov relative to 0.32 today.

Accumulating @ 0.32.
Extremely strong support.
Rebound is imminent after 3 days of red.

Kraken improved, debt restructured, new contract won, additional shareholder's financing to strengthen balance sheet, disposal of idle asset to pare down debt and save maintenance cost, OPEX cost rationalization, higher OMS utilization and stronger operating cashflow.

All the above points to a turnaround, and the mega trend ain't going to stop just at 0.32. Take advantage of short term volatility / dips / profit taking or whatever you name it, trust your guts, buy and accumulate, and assess whether you made a right call after Q3 results are out showing 3 consecutive quarters of growing net profit.

relax guys let's not get personal.
pump and dump, trash and cash are just two sides of the same coin.
let's just agree to disagree on facts and logics.

Just managed to check the price and it looks so attractive now.
i'll probably buy more and in 2 months time when Q3 is out we can round up again.
have faith, trust your guts.
All the best.

Relax, don't be too affected by daily volatilities - watching it minute by minute going 2 bids down or 3 bids up is just going to make you go crazy.

See the big picture, don't lose sight of the turnaround case and improving fundamentals. with this you will have much better clarity and conviction on what to do.

Very conservatively assume Q3 operationally similar to Q2 (without any further Kraken Improvement):

Baseline: RM78m net profit
Plus: Perdana disposal +RM21m gain
Plus: Savings from maintenance and insurance expenses of Perdana, RM6m per month = RM18m

RM117m Q3 net profit? ;)

Thanks IK. Amongst all the brokers, I think Affin Hwang and JP Morgan's research is the best.

Affin Hwang has deeper access to management, they just invited Armada's management team to their office for a roundtable with 20 institutional investors. There is definitely information asymmetry here vis-a-vis other brokers. While it's still advisable to sieve through the facts in their report and take it with a pinch of salt, their report is definitely worth more salt.

BA's balance sheet is now stronger with the latest RM315m cash infusion by AK.

Not to mention there's another RM1bn cash on balance sheet, so there is more than sufficient cash to finance the ONGC FPSO contract while maintaining a good cash buffer for working capital.

Strong cashflow generation from Kraken improvements and increased OSV utilization will further pare down debt over the next few quarters.

Golden opportunity to buy on dip on overall bursa weakness these few days before upwave resumes in line with stronger fundamentals. Carpe diem!

Now’s the time to buy on dips for those who have been wanting to enter or accumulate more

Now’s a good opportunity to buy on dip, and short squeeze.

Jefferies report out: Upgrade TP from 0.255 to 0.36 on partial financing secured for new contract.

Hong Leong report out: Upgrade TP from 0.34 to 0.44. Positive on securing partial funding requirement for ONGC contract, reducing jitters.

*Yawn*
Reposting an earlier post before my sweet dreams.

——

Dear fellow long investors, I think it's best to ignore uninformed, gibberish comments on this forum.

We also do not have the obligation to respond to any questions and challenges, especially those who only seek to provoke and seek attention. The more you respond, the more you engage, the more stoked these people get. It's a waste of our time, our life. Don't feel the need to respond when someone posts some old, outdated news on this forum. Or the occasional RI rubbish. Or a list of questionable, unsubstantiated argument points written with poor english. It's quite evident to everyone that these are irrelevant, so let's just graciously allow this group of people to shoot themselves in the foot and discredit themselves, it's their right if they want to do so.

Henceforth you will notice that most of my postings, it's as if I'm only talking to myself - stating the facts of the situation, and my views and analysis. I almost do not respond to any positive (my apologies) or negative, inflammatory comments.

*Yawn*
Have a goodnight everyone.

There is 0% chance for a PN1 announcement from Armada following the string of recent good news, including debt restructuring, idle asset disposal to pare debt, cost rationalization exercise, stronger cash flow and higher utilization. Over time, the strong and consistent cash flow will further pare down LT debt. At the current run rate of operating cash flow, in 4-5 years time, Armada’s debt will be half of what it is today.

When we reach that point, it’s not PN1, it’s RM1.

As usual, the bears have come out once again dissing a positive development. I recall during Perdana’s announcement when the share price was still 0.265, some bears started dissing about how Armada should operate the vessel instead of selling it, should do this and that bla bla, and they were not impressed and called a sell. Today we’re at 0.35.

This news today is undoubtedly another very good news for Armada. See the big picture and you will know that the shareholder loan is in fact an ingenious equity injection by AK without dilution to strengthen Armada’s balance sheet. The company once again has further derisked its financial distress, and this will be rewarded in the share price.

Reiterate that the shareholder's loan from AK is fantastic news for Armada.

1) It's a testament to AK's will and commitment to turnaround the company by putting in more $. He definitely can see the opportunity.

2) Shareholder's loan are much much better than bank loans to fund growth initiatives. It's easily extended and refinanced if need be, just need AK to give a nod. Basically, today's announcement to me is saying that Armada's balance sheet is strengthened by RM315m in cash.

Q3 will be out in another 2 months, we can expect a third consecutive quarter of net profit.

Also news for Claire compensation of up to US$285m will be out anytime from Oct onwards. Even a modest 50% award will send Armada straight up to 50 cents.

Not to mention further Kraken improvements and completion of Kraken debt restructuring to LT in the next few months, news of redeployment of Armada installer, further OSV deployment for Petronas who vowed to ramp up capex in 2H2019 (supposed to spend RM50bn but only spent RM16bn in 1H2019).

We are really only half way there to 70 cents at current price. See the big picture.

The shareholder's loan by AK is a testament of his believe and will to turnaround Bumi Armada.

The company has made very substantial progress in the last 2 quarters led by the new management.

See the big picture, the fundamentals are getting increasingly strong. It's a classic turnaround case with the support of the largest shareholder, and one of Malaysia's richest man.

Another big positive.
Loan financing from AK is really equivalent to equity injection but without dilution.

You have to understand that AK will not call default on this loan unlike banks.

In other words, you can just see this as RM315m of patient cash just injected into the company's bank balance to fund growth expansion.

The institutional investors will move in after analysts issue reports.

Make your own call, but think fast.

Dear fellow long investors, I think it's best to ignore uninformed, gibberish comments on this forum.

We also do not have the obligation to respond to any questions and challenges, especially those who only seek to provoke and seek attention. The more you respond, the more you engage, the more stoked these people get. It's a waste of our time, our life. Don't feel the need to respond when someone posts some old, outdated news on this forum. Or the occasional RI rubbish. Or a list of questionable, unsubstantiated argument points written with poor english. It's quite evident to everyone that these are irrelevant, so let's just graciously allow this group of people to shoot themselves in the foot and discredit themselves, it's their right if they want to do so.

Henceforth you will notice that most of my postings, it's as if I'm only talking to myself - stating the facts of the situation, and my views and analysis. I almost do not respond to any positive (my apologies) or negative, inflammatory comments.

The bears have a point, although it’s always been the same old point - debt.

But please bear (no pun intended) in mind that the current low price of BA is way more than risk adjusted. A company of this scale, expertise and technical capabilities should be worth way more, if not for the fear of financial distress. The cost of financial distress was priced in back in 2018 when armada’s ST debt was due, leading to a precipitous fall in share price from 80 to 15cents. It was made worse with kraken impairments.

Fast forward today, the risk of financial distress and illiquidity has been removed with refinancing. Kraken improved. Cash flow is stronger, profit is higher. New contracts won, mgmt more proactive. Idle assets sold for cash to pare debt. Utilization rate is up.

Has it not occurred that what’s happening to the share price lately is just the market recognition that the distress risk is dissipating, returning armada one step closer to what it’s worth? Don’t focus so frenetically at the day to day fluctuation, take a step back, look at the big picture. Understand why the market is valuing armada higher today instead of trying to guess whether it’s going to go 2 bids up or 3 bids down the next min, hour, or day. When you can see that, you will see what I see, which is the mega trend of a turnaround case with an overall upward momentum.

No comments on whether hard to break. Just a matter of momentum and time.

The share has to break through 0.355 over the next 2 days, then we will go closer to 0.4. It will continue to trend up towards Q3, when BA reports 3 consecutive quarters of profit, higher OMS utilization, and further improvements on Kraken.

Oil price also has a chance to go back up to 65-70 pending further Saudi updates, Middle East war situation, and trade war deal between US and China.

When improving micro meets supportive macro in a turnaround case, I can only recommend to hold tight and buy on dips.

See the big picture. See the big trend.
Classic turnaround case with supportive macro.

Kraken improved, debt restructured, new contract won, idle asset sold to pare debt, overall higher utilization and stronger cash flow, bonus upside from Claire and writeback. Oil price 60+ trending up, trade war de-escalating.

Hold tight and buy on dips.

No one said it's wrong, investar.

https://www.bumiarmada.com/414_410_87/Web/WebPage/Sasha-Vijayananthan/Sasha-Vijayananthan.html

https://bumiarmada.com/209_209/Web/WebPage/Noreen-Melini-Muzamli/Noreen-Melini-Muzamli.html

http://www.bursamalaysia.com/market/listed-companies/company-announcements/6286729

Quite funny, the whole world now knows that these employees made decisions to sell @0.305-15 and it now went up to 0.345.

Once Kraken is fully resolved, theoretically, it should bring us back to where it was before the Kraken impairment, which is around 0.70.

and note, when it was 0.70 back then - debt restructuring was not done, oil price was at US$40, ONGC FPSO not won, Perdana not sold, HQ OPEX not cut yet and many more.

Well, to be a bit more conservative and not so ambitious, I really don't see why the share price shouldn't at least go back to 50cents+ as a start. Well of course, unless, you argue that the share price around 0.70 - 0.80 that Armada has been trading at for 1-2 years is overvalued in the first place.

Your money, your call.
and my call is hold if you already have the shares, buy more if there are temporary dips and ride the upwave. Remember to see the big picture. It's clearly a turnaround case.

continue to hold/buy.

See the big picture, the business current. It’s a classic turnaround case. No more liquidity risk, cash flow stronger, utilization higher, debt lower.

Holding since .215.
Called a strong buy and time it right before QR.
Many bears came out with many high debt thesis. Fair enough that’s a valid reason. QR came out, price surged.

At .265
Called a strong buy after Perdana news.
Many bears came out again and gave a bunch of views about how it’s not that great. Armada should have done this should have done that instead. Fair enough maybe there’s some business logic to it. Market opens, price surged.

At 0.305
Called a strong buy still.
Many bears came out, said many things I can’t remember. Said all the “promoters” like me disappeared because we have sold all alr and ran. Long weekend. Market opens, price surged.

At 0.315
Calling a strong buy still.
Many bears came out...you know the drill.

Make your own call. All the very best.

The strong oil price spike is preparing BA for a good run this week.

I hope the management team will take full advantage of this tail wind.

Announce something good over the next few weeks to give another booster shot to the upward momentum.

and 2.5 months more to go before the next QR.

It's kind of annoying that it's a public holiday and bursa is not trading when there's a great news like the oil price surge.

A good company does not mean it’s a good investment.
A bad company does not mean it’s a bad investment.

At what price, is what makes all the difference.

30 cents for a global FPSO giant. High debt, yes. But at such a damn cheap price? More please!

it needs to stabilize a few days at this price before resuming the upwave and push higher.

Collect on any dips created by bears, profit takers, and short sellers. If you can see the turnaround potential for it to go up 10-20 cents, you’ll know that 1-2 cents fluctuation is nothing.

https://www.theedgemarkets.com/article/perdana-disposal-seen-earningsaccretive-bumi-armada


This is a good summary and very similar to what I've been writing earlier on this forum.

Don’t fail to see the big picture. BA’s fundamentals have substantially improved and derisked, and the share price should be worth way more.

Profit takers and IDSS players may spring into action, take this opportunity to buy on any dips. After the share price consolidates for a while, the upwave will resume.

Next up in focus: Armada Claire.

According to AmInvest:

"The group’s other idle Armada Claire, currently laid up in Batam, is being evaluated for a fresh charter for deployment as well as potential disposal."

Claire is a big one. Redeploy / sell this, we can get 35-40 cents.
Win the US$285m compensation, 50 cents and above.

I reiterate - do not fail to see the big picture. The company is definitely turning around.
The new CEO is a lot more hands on:

1) Went on Kraken to oversee and enforce improvements

2) Restructured most debt to LT

3) Sold idle Perdana FPSO

4) Sold 5-6 idle OSV, deployed other OSVs for new contracts in Malaysia, increase utilization from 39% to 51%

5) Secured ONGC FPSO new contract award

6) FPSO Olombendo's expected contract expansion

He also went on record to state that 2H 2019 will be much better. We'll see.

This phenomenon is what we call - short squeeze.

Evaluate the facts, take the analysts opinion with a pinch of salt.

The fact is that Armada Perdana, an idle asset has been successfully sold at US$40m for cash and a gain on disposal instead of doing nothing and incurring maintenance expenses.

Analysis opinions: Some view this as positive with no caveat, some view this as positive BUT....etc. this one you need to make your own call whether you agree.

Luanda — Italy's Eni is experiencing a purple patch in oil discoveries offshore Angola, making its fifth oil discovery in 12 months in the prolific deepwater Block 15.

The oil major made a light oil discovery in the Agidigbo prospect close to its existing West Hub development, it said Monday.

Eni said post-drill results indicate between 300 and 400 million barrels of light oil in place. The discovery has further upside that will be proved by an appraisal campaign planned in early 2020, it said.

Production from this field will be fast tracked to the Armada Olombendo FPSO, therefore extending the East Hub's production plateau, and will be part of the Olombendo crude export grade.

Feel free to sell if you think so.
I would encourage you to follow your mind.

More analyst reports out.

JF Apex, Kenanga and Maybank all view Perdana as a positive development in monetizing idle asset to reduce debt. This is in line with the Jefferies report.

Overall market sentiment is poor today dragged down by the Axiata Telenor merger failure, but BA has maintained a commendable share price upward momentum.

Profit takers and short sellers could soon start their action with this share price hike. Continue to BUY on dips and short squeeze IDSS.

Like I said, Perdana sale is a positive to Bumi Armada.

The share price movement today has validated that.

Don’t fail to see the big picture that Armada is at a pivot point of turning around. Hold it out for at least a few more QRs. There’s a real chance to double your money here.

I think it’s moot to anchor it back to the heydays when it’s RM1 or even RM2+.

The share price is so cheap now exactly because of the perfect storm - high debt, problematic vessels and clients, oil price crash etc. We are seeing 0.3x P/B for BA vs 2.5x P/B for Yinson.

At this price RM0.2+, market basically has punished Armada severely and more than priced in all the negative parts - including all the write downs that happened last year due to idle assets and Kraken’s issue. This is the most recent base point we should anchor to, against any new development.

Dwelling in the yesteryears when BA was in its full glory and therefore BA “should have done this or that” won’t help. The facts and realities have changed. We are not in a USD130 per barrel oil price world anymore. It’s now USD50-60 and likely to sustain there for a long period. This is the new reality that we must all accept. Along with the strategy on how to survive and turnaround.

Idle asset sale to raise cash and reduce leverage is definitely the right move. The no.1 priority for BA is to deleverage and reduce balance sheet risk, and thereby creating equity value.

BA can ill afford to sit on an idle Perdana vessel, spend $ maintaining it for another year or 2, hoping for redeployment which may not come through, and even if BA got super lucky to redeploy the vessel, having to incur capex to refit the vessel again for another field. That is too much risk, too much uncertainty to sit on its ass doing nothing for “hope”.

Sell it, raise cash. Cash is king under a new reality.

Hence I’d reiterate it’s a good and positive move. Good job Bumi Armada.

First analyst report out on Armada Perdana disposal by Jefferies (KAF-Seagrott):

- TP upgraded to RM0.255
- Jefferies view this as POSITIVE to the group.

"In our view, disposal of Armada Perdana, which has been off-charter since June 2017, is a positive as it will provide the group with some liquidity....by monetizing idle assets. According to the company, the gain from disposal will be US$5m....sales proceeds to the group will be payable by CESL over two years from the time it achieves first oil in another Nigerian field after redeployment".


----

Like I mentioned - selling the idle Armada Perdana for cash to reduce debt / fund FPSO Kakinada (ONGC) capex is POSITIVE to Armada.

Will post more when other brokers release their report.

With the improved fundamentals, the new baseline has increased to perhaps 0.25. It’s unlikely for any dips to go below this, and if it does, buy strongly for a kill.

Do not fail to see the big picture. Armada mgmt has always said that they will sell idle OSVs and Claire and Perdana to improve cash flow and strengthen balance sheet. Earlier on OSVs has been written down to market value and the sale of 4 vessels earlier and 2 vessels on 2Q2019 has been well received by investors, as evident in the share price.

For Perdana, it’s the same strategy and logic with OSVs, and better still, there will be a gain recognized because earlier on they have fully written down this to 0 in 2H2018. In other words, they expected to get nothing back from Perdana due to Erin’s bankruptcy but now they managed to sell to CESL for US$40m.This is an unexpected windfall and very positive to Armada’s balance sheet.

Continue the good work with Claire (vessel sale + court compensation), deploy more OSVs to Petronas in Malaysia and being utilisation back to 70%+, and with further improvements in Kraken (write back likely in 2020 as they need a few consecutive quarters of improvements to show that its sustainable first), it’s a no brainer that the share price will go back above 40 cents.

As someone else has said on this forum:

Dumb dumb hold.

Oil price hike @ USD62 now.
Next week back to a strong run.
Have a good long weekend!

They need to sell Claire too, hopefully at US$50-100m. It’s an idle asset burning cash with no revenue. If they pull that off, share price will pop further.

Institutional investors will like this news.
If a step in the right direction strategically - idle asset sale for cash to reduce debt and create value.

"However, the Armada Perdana FPSO was previously estimated to have a book value of up to RM300 million."

This is based on an old estimate done by an analyst. They have probably already fully written down the amount in 2018. Else they would not make a US$5m gain in 2019 and further US$23m later.

Having a RM300m or US$75m book value doesn't even make sense, because if you sell at US$40m, they will recognize a loss on disposal. So logically it has been written off in FY2018 like you have correctly pointed out.

IK - it's US$5m gain recognized in FY2019, and additional US$5 + 17.9mm will be recognized later.


"2.USD5 million on or before the earlier of 6 months after the Delivery Date or when oil is first produced in the field to which the vessel is deployed (the “First Oil Date); and

3.The remaining balance of USD17.9 million shall be payable within 2 years from the First Oil Date.

The Group will recognise the unpaid portion of the Purchase Price as and when funds are received from CESL. >>> this refers to #2 and #3 above, to be recognized later.

The gain to be recognised in the financial statements for the financial year ending 31 December 2019 will be approximately USD5.0 million. >>> this represents the amount received in FY2019.