QR will be out any time now.
Would suggest to strongly accumulate as much as you can.
If they announce a strong QR - it could open at 0.235+ and continue to run up.
Don't lose out on the swing.

https://www.proactiveinvestors.co.uk/companies/news/220852/enquest-confident-as-magnus-and-kraken-fields-perform-well-220852.html

“It also flagged a significant improvement at the Kraken field where gross production averaged 33,00 bopd in March and April, and full year guidance for the field remains at 30,000 to 35,000 bopd”

“FPSO performance at Kraken has improved significantly with two trains online and we continue to drive further improvements with the FPSO operator. Production from DC4 at Kraken has been better than expected and both Magnus and PM8/Seligi have performed strongly.”

Very simple - because there will be documentation trail to "amend QR to deficit" that they cannot explain other than for the purpose to manipulate share price, which is against the law and a crime. This is a large public listed company, not a private SME.

Gary Neal Christenson should speak to the press and media more about the very serious cost rationalization exercise that Bumi Armada is undertaking now - this will boost confidence.

Please just don't keep quiet like Leon Harland. Else you're just another Leon Harland.

You cannot "amend a QR to deficit" at last minute.
The auditors will not allow that.

Remember, the new CEO will want to show sparkling results for all 4 quarters in FY2019, especially when he first joined to prove himself.

It's very easy for him to do it because all the large impairments were already done in FY2017-18, with Kraken hugely impaired and OSV vessels impaired to market value.

I think the only way we will see a loss making QR will be potential loss on disposal of OSV, if they want to sell it below market value to get rid of it quick and lower debt, instead of letting it lie idle and cost $ to maintain. In any case, this is a "good loss", if any, because loss on disposal is paper loss but the proceeds from disposal and $ savings from maintenance expenses are real cash, which can be used to lower debt overhang.

Share price is very resilient.
Time to buy in today.

best if BA announce good results ASAP so it has sufficient time to run-up next week.

Thereafter we will see more volatility as 1 Sep kicks in with trade war - where US will impose additional 10% tariff on Chinese goods and expect to see China retaliate. Then that week will be up down up down up down.

EPF technically has no impact to share price.
My transaction sizes is bigger than EPF's last 2 announcements.

Kraken significant improvement + lower depreciation charge (due to impairment in FY18) + cost-cutting initiatives to lower OPEX + no more impairment foreseeable for FY19:

= higher net profits.

Stay tuned.

https://financialexpressnow.com/2019/08/fpso-vessels-equipments-market-to-receive-overwhelming-hike-in-revenues-by-2026/

https://www.marketexpert24.com/2019/08/22/brazil-fpso-market-booming-with-leading-key-vendors-like-bp-petronas-chevron-exxonmobil-shell-petrobras-bumi-armada-berhad-sbm-offshore-bw-offshore-modec/

QR can come out anytime now.
Take position.
Goodluck.

So far BA is doing better than I expected.

I was expecting it to dip to 0.205-0.21 as investors take a risk-off approach pending QR announcement. But so far it has not happened yet.

Company insiders, those who are friends with BA auditors etc. should already have the "don't-tell-anyone-i-said-this" info already regarding the upcoming QR.

A good net profit aside, perhaps the most important thing is for BA to show debt reduction and the plan for its lagging OMS segment.

Net profit alone is not enough - because investors will ask "so what? the debt amount is still high".

BA needs to work on the hope, outlook and tangible plan for debt reduction. That will be the real kicker to its share price.

Let's recap all the good news released by Bumi Armada in the past 12 months but has not been priced in:

Aug 2018 - 6 year extension of Armada TGT-1
Sep 2018 - Armada Kraken Final Acceptance
Feb 2019 - Removal of incompetent CEO Leon Harland
Apr 2019 - Restructuring of US$660m debt from ST to LT
May 2019 - Winning RM8.8 billion ONGC FPSO contract
May 2019 - Reversion to net profit with RM62 net profit in Q1 2019

Share price has remained around RM0.20+ although it really should have been RM0.30+ if the market has properly priced all the above good news in.

It will be a turning point come end Aug if Armada is able to show profit growth above RM62m in Q1 2019. Institutional investors / hedge fund guys can find the justification to buy in big when the company starts showing at least 2 quarters of sustainable and growing net profit.

It's quite obvious that the new CEO is dead set in producing a sparkling set of results for FY2019, and since they have done all the impairment / kitchen sinking in FY2018, this is fairly easy to achieve. Also, the CEO's management incentive plan shares are issued at around RM0.20, so he has all the incentives to bring the share price up back to RM0.30-RM0.40 and make a killing from it.

Stay tuned.

Once QR released and shows sustainable growth in net profit, and hopefully with good news on Armada installer, the share price could pop like KNM.

The OMS segment is key. It needs to show that it’s not lagging.

Let's recap all the good news released by Bumi Armada in the past 12 months but has not been priced in:

Aug 2018 - 6 year extension of Armada TGT-1
Sep 2018 - Armada Kraken Final Acceptance
Feb 2019 - Removal of incompetent CEO Leon Harland
Apr 2019 - Restructuring of US$660m debt from ST to LT
May 2019 - Winning RM8.8 billion ONGC FPSO contract
May 2019 - Reversion to net profit with RM62 net profit in Q1 2019

So now just wait a few more days for QR to come out. Be patient and buy in if there are any dips.
Otherwise, with the current price of 0.22, you can’t go too wrong.

The manipulators are probably the hedge funds and high net worth traders. But whatever they do, as long as BA’s fundamentals remain strong, the price will eventually correct itself and go up. It’s far too costly to manipulate the market over the long term against fundamentals.

Unfortunately, that is incorrect. As I’ve mentioned earlier, AK’s Usaga Tegas is currently holding more than 33% of Armada. AK cannot, directly or indirectly (via nominees) purchase any more shares without triggering a Mandatory General Offer according to bursa securities law. AK will not be so stupid to hide and purchase indirectly via nominees and risk breaching the law, because eventually it will get found out. BA is just a small part of his portfolio, and it’s just basic logic he will not risk tarnishing his reputation for a few hundred million ringgit in profits. That’s nothing to him.

That's a good news - 2Q2019 GDP stronger than expected.
Thanks.

But again, bear in mind that EPF was heavily selling in those past quarters.

EPF has stopped selling because they have reached the 5% threshold now.

They will cease to become a substantial shareholder below 5%, and I believe internally their management need to have approval to do that.

With no more EPF selling (which honestly took the wind out of a lot of the big positives announced previously - e.g. debt restructuring, new contract win, reversion to net profit etc.), the landscape might be different this time.

InvestorKING End of August 2018 (negative result), end of November 2018 (negative result), end of February 2019 (negative result), end of may 2019 (positive result) all before the announcement sure drop

---

Agreed. Institutional investors taking a risk-off approach and doesn't want to ride the swing.
Come the last week of Aug, you may see some share price pressure, that's the right time to buy on dips, and then hold for QR to come out. Very likely to be positive.

New CEO also projected 2H2019 to be much better than 1H2019, so we can expect even more for the next 3 QRs, at least.

Any upcoming news?

I roughly recall someone on the forum mentioned that they might have won a new subsea contract but not announced yet? If that's announced, then we have a chance of hitting 0.25+. Otherwise, might be a tad difficult.

There will be increased macro volatility in the next 2-3 months due to trade war escalation and constant flip-flopping by Trump. So there will be opportunity to buy in cheap on big dips (like today, following 800 points dip in DJIA ytd) and resell when it spikes on good days - yielding around +/- 2.3% for every bid of 0.05.

However, immediately before the upcoming QR is released (potentially week of Aug 25), suggest to hold and let the share price run for another month. There's a chance for it to go back to closer to 0.30+, provided there's good macro sentiment - e.g. trade war resolved and US-China reaches a deal.

Not really, I did the 1.8m shares purchase @0.215 at 4.59pm. Couldn’t get it at 0.210.

I bought around 1.7m @ 0.215 a few days ago, sold at 0.23. Now recycle capital and repurchased more at 0.215 again. Rinse and repeat until QR is out then maintain hold.

Bought 1.8m shares @ 0.215

IK does have a point on the share price and queue volume appear manipulated. Although I’m not so sure about the theory about short sellers and operator collecting shares, but that’s just my view. I can’t prove or disprove this, but point taken on the difficulty in climbing back up. Though I’d personally attribute that to be due to debt overhang on the balance sheet.

Very valid point on oil price which affects sentiment - hence there’s the opportunity to collect closer to 0.20.

A defensive queueing strategy at 0.20-0.205 is probably a good idea to take advantage of volatility.

To me 0.01-0.02 doesn’t make much diff as my target sale price is 30 cents and beyond hence entered at 0.215.

My bet @ 0.215 is based on the probability of it dipping below 0.20 being much smaller than the probability of it trending towards 0.25 by the time QR comes out in a few weeks. This is a critical quarter as this is the first time Armada can show profit growth and convince the institutional guys. Last quarter was reversion from loss to profit so some were still on the fence on whether it’s sustainable. This is the quarter to prove it, and there’s a very good chance Armada will be able to do it.

Of course, we could enhance returns and try to get it cheaper at 0.20 - 0.21 if we reach there with some help from Trump.

Make a call on when to move in.

Patience is virtue ;)

bought more @ 0.215

To those who wants to collect but is hesitant, consider the few days before QR (end Aug).

If you look at past share price - the share price in the week before the last few QR is almost always down - some investors de-risking and doesn't want to take the chance on the swing. That would be a good time.

Otherwise, if DJIA stages a rebound tonight with high double digit or triple digit increase, then we will start seeing upward momentum when the market opens tmrw.

BA has been surprisingly resilient despite strong heads winds and bearish market sentiment from trade war escalation. Well supported even at 0.215.

From here on out - the outlook seems better especially with QR coming and fed rate cut expected again next month.

That’s provided Trump doesn’t tweet something stupid again.

Buy queue > sell queue by 4x.
Yet price unchanged.
Defensive buying tactics.
Very good.

If the market can breach the 0.22/0.225 hurdle (not an exceptionally big one), then we can start seeing the price moving back to 0.25 as we go closer to QR announcement with profit growth expected.

Bought more @ 0.215.

Can slowly buy over this month.

FPSO counters are preferred over upstream when oil price is down - charter rates are fixed no matter what oil price is. Only risk is when oil price hits below say 30 and customer goes bankrupt and can’t pay FPSO operators. We’re very far from there.

Bought 1.7m shares @ 0.215

Waiting for “Others” announcement haha.

Fed rate cut on Tuesday expected would improve sentiment and liquidity and bursa is likely to do well on Wed. Based on macro timing alone, today is a good time to enter.

I’d estimate Q2 to be around 100m net profit.

Good chance to buy on dip - the closer we get to end Aug (next QR) the price will get higher with profit growth strongly expected.

See you all again in a month. Cheers.

Next QR will be crucial.

Institutional investors are sitting on the sideline to see if Armada can generate sustainable and growing profits again. Armada has reverted to positive profit last quarter after a long time. So now they want to see if this quarter is positive again, and grow by how much, before they make a big move.

And this quarter quite obviously will be strongly positive, so I’d expect a strong spike post QR.

So, I’d suggest to buy in slightly earlier than the market before next QR and take a long position. Doesn’t have to be now, but just keep in mind QR comes out end August. Your call.

Slow climb with deep volume is the best.


0.35 TP end 2019
0.50-0.65 TP end 2020

Might be faster if Claire case won with US$284m (instant spike 20 cents) or Kraken improvement announcement.

0.35 TP end 2019
0.50-0.65 TP end 2020

Might be faster if Claire case won with US$284m (instant spike 20 cents) or Kraken improvement announcement.

Filter through the noise - believe in the fundamentals.

Why Armada's fundamentals are good:

1) Strong, stable and consistent cashflow due to FPSO long term fixed charter rate
2) One of the largest and most experienced FPSO player globally
3) Backed by AK - that in itself lends some support with creditors hence all the recent restructurings are successful

Why Armada's fundamentals are not so good:

1) Debt overhang. Net Debt to Equity of 2.7x is no joke. That's why despite all the big positives, Armada's share price failed to sustainably go up.
2) OMS segment is a big drag on earnings - below 50% utilization and this will still struggle for couple more years.
3) Kraken overhang - this is the killer and last straw which precipated the price drop from RM0.6x to RM0.1x. Until they sustainably fix this, which will take some time, it'll be difficult to go back up to the RM0.5+ share price level.

Looking at the fundamentals objectively, I can understand why the share price is still depressed.

That being said, my view that the share price will still be on an uptrend as things slowly improve, albeit a gradual one.

For full disclosure, I still hold a sizable amount of Armada's shares, and will continue to hold.

So, patience is key. Not the end of the world is share price trends back to RM0.2 and don't go batshit crazy if it pops above RM0.25.

Technically yes that was the plan to hold till June 2019, because debt restructuring would have been done and liquidity risk averted.

However, unfortunately this and many other big positives announced including reversion to net profit and ONGC contract win are not priced in by Jun 2019 - share price spiked to 0.28 but swiftly went back down to 0.20 with parties like EPF irrationally selling on good news.

So, no choice but to give it a bit more time and patience for it to hit my desired TP. This will take a couple more quarters where Armada has to announce growing earnings and de leveraging balance sheet over time for share price to sustainably increase (ie not a short term spike of 30-40% over one day).

Armada has and always will be a patient play on deleveraging over time.

So my advice is not to hang around here too much everyday - it’s just gonna make you go crazy. Just have faith that overtime share price will improve substantially. And it will.

Hi, it's been a while.
Thanks for the Enquest report.
I think the gist is on Page 13:

"Recent Kraken performance materially improved; initiatives ongoing"

My year end TP for Armada is RM0.35
2020 year end TP is RM0.50-0.65.

Have faith, it's going to turn around.
Till then.

or google FPSO network - Armada Kraken FPSO - Challenges Deploying an FPSO for Heavy Oil Production.

https://www.fpsonetwork.com/events-fpsoworldcongress/downloads/armada-kraken-fpso-challenges-deploying-an-fpso-for-heavy-oil-production?-ty-m

Try this.