I've held through the past 8 quarterly results - gone through the ups and downs of the 2018 excruciating write-down losses of Kraken and also the reversion to strong net profit in 2019.

Gary will fight very hard to produce a sparkling full year 2019 results because his pay is tied to it amongst other components like Kraken improvements etc.

The big elephant in the room is the so called potential impairment of Claire post court judgment as brought up by some people on this forum. Claire's disappointing results have obviously been priced in during the fall from 0.55 to 0.35. Also Armada has not declared whether they are going to appeal or not, so any potential impairment in Q4 2019 is premature until the final outcome at the court of appeal (if BA decides to appeal).

On balance, we're likely to see the best quarterly results ever in Q4 2019 from these 3 key drivers:

1) Kraken's uptime to >90% in 2H2019 (verified by Enquest)
2) Perdana RM18m/quarter savings fully recognized in Q4 from the sale of Perdana in end Q3.
3) Higher OMS utilization (combination of idle vessel disposal to pare down debt and more vessels deployed in Malaysia for Petronas)

Thereafter, in 2020, the key catalysts are:

1) OMS utilization improvement from the current 58%. This will be key in 2020 as the key growth driver. This includes the deployment of Armada Constructor and Installer at Caspian Sea Otherwise, all other FPSOs are at full utilization.
2) Disposal of Armada Claire - whatever value they get will be a cashflow gain to offset debt. I have assumed that BA will not win any appeal on Claire and will only get back the RM5m awarded by the Australian court in Sundry claims.
3) Further disposal of idle OMS vessels unlikely to be deployed to reduce maintenance cost and get cash to pare down debt. The goal is to get utilization of OMS closer to 100%.

Lastly, the 9+7 years RM8.8bn ONGC JV contract with Shapoorji Pallonji will kick in later, maybe from 2021 onwards.

There you go, all the key factors and drivers clearly laid out for you to make informed decisions. Whatever analyst reports you read later will more or less say the same thing.

Goodluck all. Your money your call.

It's time to refocus on the business operations of Bumi Armada.

Which is a fixed term, fixed charter FPSO contract that is stable and recurring for many years to come.

I think the market is very slow to recognize Kraken's improvement to >90% operational efficiency, which Enquest has deemed to be excellent and above expectations. This would mean that Bumi Armada would not need to pay any penalties to further fix Kraken for a long time period in the future (net off against charter revenue), so we will see substantially increased cashflow from Kraken in the future. This is HUGE for Bumi Armada.

We'll see this reflected in Q4 onwards.

there’s no need to explain or prove anything to bullrun1985. Does his opinion really matter? Since when do we owe him anything?

What has he contributed to this forum apart from asking people what are other people’s holding or if anyone has bought any shares? Did he contribute any logical thoughts, useful analysis supported by data?

No, none, nothing, zilch.

Just ignore the gibberish on this forum.

Happy hunting. Goodluck all.

No point deliberating so much if there’s no intention to trade.

See you guys after QR.

Your money, your call.

Emotion aside, what you can do is to follow logic and buy.
That's what I did.

Put emotions out of the way.
Fundamentals remain strong and improving.
Mahathir or Anwar or anyone else, does it really matter for BA?

I’m just making a logical move lol.

Once the next PM is announced (could be Mahathir again), the whole market will spike. Happy waiting for those who haven’t entered. :)

In total managed to get 2.5m shares today at 0.375
This will be my opportunistic portion
Thank you and god bless for the discount while fundamentals remain strong and continue to improve

Take position.

The strongest rebound is coming once all these funny maneuvers are over and a strong QR is released showing extremely strong Kraken performance + higher OMS utilization.

Mahathir quits as Bersatu Chairman - sob story or tactical move?
Haha this is so interesting.

https://www.theedgemarkets.com/article/dr-m-quits-bersatu-chairman

Very soon it will start to move back to 40 cents

Also let's not forget it's likely that a very strong QR is about to come on Wed.

If anwar becomes next PM - uncertainty removed.
If mahathir re-elected to become next PM - uncertainty removed.

The market has priced in the uncertainty this morning with the big dip.
No matter what is the outcome - BA will be unaffected operationally.
Hence, the only way is to go up when all these blow over.

All the very best of luck! :)

All these will blow over by the end of today.
Now just wait for official statement from Mahathir, Anwar.
Panic buying to ensue thereafter.
Whichever administration - there is no impact to Bumi Armada who earns a majority of its revenue overseas in USD.

Whie we're all focused on malaysian politics today, let's take a step back at take a look at China's coronavirus new cases which dropped to around 400 new cases today. This is a very encouraging data.

Dr M resigns, PPBM backs Anwar, Anwar becomes PM, succession risk averted, no more infighting, reform continues?

If that’s the outcome, massive panic buyback.

Exciting day!

I would expect a panic buyback in the afternoon once the clouds are clear.

Thank you FATA86.
It’s a good outcome.
Buyback and rebound will start in afternoon session.
Maybe overall still close red due to coronavirus.
But I think 0.39 today is about right for closing.

Just an unsubstantiated purely speculative wild guess with no basis.

Relax, keep calm, and continue buying on temporal dips.
Your money, your call.
Goodluck!

TQ godspeed

Please can whoever wants to panic sell please sell at 0.375.

I'm at the top of the queue at 0.375 and my notification system is flooded by small sell lots of like 1k to 10k shares please sell a big chunk to me already lol.

0.375 - only managed to buy around 1.5m shares this morning.
Rebound is coming.

Shift from BN to PH - stock market got worse.

Potential shift from PH back to BN - stock market gets worse again? Apart from short term volatility and uncertainty and suddenly everyone's scared and fearful.

No impact to operations but knee jerk panic sell across all stocks.

If any impact to Armada's operations - it's actually a benefit. USDMYR suddenly increased from 0.4-0.41 to above 0.42 now. Remb that Armada earns in USD, and when they report to MYR, this would show a FX gain with a stronger USD against MYR.

Your fear is my money. Sounds harsh and cruel, but that's the truth =P

Very confident.

Buying big on panic knee jerk sell with no impact to fundamentals are the best type of bet with huge profitability.

Collected at a happy price.
Will continue to collect and push.
Politics has very little to do with Armada but fantastic discount right before QR! :)

Relax. Could possibly touch 0.375 at knee jerk open within 10 mins, that’s the time to make the kill.

Anyway, shan’t comment further on this. Gonna move very fast.

Goodluck all!!

Knee jerk open 0.38-0.385, even stronger buy ;)

Knee jerk open at 0.39-0.395, strong buy on dips!

Coronavirus + mahathir = crash for accumulation pre QR.

Probably gonna be shitty next few days.

Your money your call.
Goodluck all.

Rapid rise of international cases of in South Korea, Iran and Italy is casting a lot of fear.

Possible for general stock market share price to drop over Monday - Wed prior to Q4 release on Thursday.

Chance to accumulate at 0.37 - 0.40.

But if support remains strong and price continues to climb gradually to 0.40-0.43 in anticipation of good results, it also makes sense to continue to chase.

Feel free to sell down and sit out the pre QR release market anxiety. Post Q4 if it’s a good result there’s still time to chase right after results are released - the Malaysian market is very inefficient to price in good results.

In the bigger scheme of things, 40 cents and below is truly dirt cheap. Even 50 cents is cheap.

Your money, your responsibility, your call.

I'm also expecting RM1.5bn Kraken debt to be reclassified from short term to long term.
Management has expected this to be done in Q4 2019.
Then there will be 0 liquidity risk for Bumi Armada over the next 5 years.

"Non-current borrowings for AKPL of RM1,477.4 million remains classified as current liabilities due to existing non-compliances by AKPL under this loan, in particular Armada Kraken FPSO project not achieving final acceptance by the scheduled date, where project lenders currently have the right to issue, but have to-date not issued, a notice for full prepayment of the loan. Thus, AKPL did not have an unconditional right to defer payment of the non-current borrowings for at least 12 months after the balance sheet date.

In view that the Armada Kraken FPSO has achieved final acceptance in September 2018, the Group is currently in discussion with project lenders to remove the risk of having to prepay the loan as a result of existing non-compliances by AKPL. The Group expects to alleviate such risk by end of 2019."

There's no need to guess who I am or what I do.
Perhaps to better just focus on your own decisions.
It's a better way to spend your brain power minding your own business.
Your money, your responsibility, your call.

The price might drop on Monday on South Korea's rapid rise of coronavirus case, or it might increase with China's significantly reduced rate of new coronavirus cases (below 1k a day). Meanwhile, Brent has rebounded from around US$53 on 11 Feb to US$58 on 21 Feb. I'm guessing the positive news of China's large economy outweights the negative news of South Korea's much smaller economy.

But again, all these are meaningless when we're looking at few months down the road, the dust will settle and the coronavirus will be over.

Cash is king, but of course, your money your call.
Goodluck.

Reason why I've been buying:

Kraken fantastic performance with 90+% efficiency = Higher cashflow
Perdana cost savings of RM18/ per quarter = Higher cashflow
Potential sale of idle OSV assets to reduce debt and improve utilization = Higher cashflow
RM5m net gain from Claire's court cash = Higher cashflow

Any impairment from Claire = No impact to cashflow.

Next OPEC meeting to discuss further production cut confirmed on 5-6 March in Vienna.

According to Jonathan, BA results scheduled to be released on 27 Feb but timing uncertain.
Same day as the government stimulus package announcement.

Transacted another 6.9m shares today at 0.395 and 0.40.

It's gonna be an interesting quarter.
Most people expect a strong core net profit quarter.
But some here is focused on the possibility of an impairment on Armada Claire.
Share price seems fairly flattish as everyone's on the fence lol.
As usual, your money, your call. Goodluck.

Kraken operating at 90+% throughout 2H2019 as announced by Enquest not yet priced in - hence the severe undervaluation now.

Recall earlier that Armada was trading at around 0.65 before the Kraken amendment agreement was announced causing it to free fall to 0.15.

Now that Kraken’s problems are solved and performing optimally even in 4Q when the weather is supposedly harshest, 2020 full year performance will definitely be better.

I think we will see a write back of Kraken in 2020. 4Q 2019 is probably still too early as the management team and auditors would want to be conservative (eg show 4-6 quarters good Kraken uptime before writing back).

In any case, the share price really shouldn’t be below 0.65 with Kraken performing optimally.

Thereafter in 2020, I think we can expect Armada’s core net profit to be stable around RM350-400m.

If anyone here has the patience to hold 3-4 years the debt will be half of where it is today, and equity value will probably be at 5-8 billion, translating to a price of around RM1-1.5.

Your money, your call. Goodluck.

Transacted at 0.395 and 0.40 today around 6.6m shares.
1 week to go to Q4.
Goodluck all.

Try to think.

Coronavirus is starting to be contained in China.
New cases of only around 350 today, compared to around 1,700 day before.
The infection curve is starting to flatten and reach a plateau.

Recommend strong buy on the basis of:

1) Subsiding coronavirus fears
2) Rebounding oil price
3) Stronger Q4 results with net profit >RM90m
4) Price has been hammered down and still trading at a compelling discount and valuation now
5) Government is announcing a stimulus package soon to boost the economy - this would lead to hot money inflow into bursa.

But as usual, your money your call. Goodluck.

Assuming a conservative RM90m net profit per quarter = RM360m net profit annually.

Although P/E is not the best metric to value this stock due to different leverage levels for different O&G companies (EV/EBITDA and P/B would be better), for illustration's sake:

At a conservative 10x P/E, we're looking at a market cap of around RM3.6bn = 60cents TP

At a even more conservative 8x P/E, we're looking at a market cap of around RM2.9bn = 50 cents TP

Current market cap of RM2.3bn, or around 40 cents, is valuing the stock at around 6x P/E.

6x P/E for a RM2-2.5billion annual revenue company is truly dirt cheap.

I'm not really into micro prediction of whether it's going to be 0.38 or 0.39 or 0.40 or 0.41 or 0.42, these can fluctuate due to many different reasons - pump and dump, trash and cash, short selling, margin call, contra force sell, profit taking, value investing etc. It's pure gamble at these tight ranges. Get it right = pure luck. Get it wrong = bad luck. But what is clear - there are no fundamentals or skills involved in these small volatilities. It's just pure luck.

A more interesting movement over the next couple months would be 0.30, 0.40, 0.50, 0.60, 0.70 - that would be much more meaningful and reflects the true shift of market sentiment and market acceptance of Bumi Armada's change in fundamentals.

Q4 results two largest profit boosters:

1) Significant improvement in Kraken operating efficiency at 90+% in 4Q. (per Enquest announcement)
2) Full recognization of RM18m/quarter maintenance cost savings of Perdana sale at the end of 3Q

I would expect core net profit to be >RM90m in 4Q, at least 20% growth over 3Q.
Your money, your call.
Goodluck.

Recall Christenson guided that Bumi Armada will be doing a lot better in 2H2019 compared to 2H2018. We already know that Kraken's uptime is >90% now which is fantastic, coupled with significant RM18m/quarter savings from Perdana's sale to be fully recognized from 4Q2019 onwards.


“From a prudent analysis, unless something else comes up that we don’t expect, we should be doing a lot better in 2HFY19 (2H in financial year 2019) than we did in 2HFY18,” said Christenson.

https://www.theedgemarkets.com/article/bumi-armada-says-no-cash-call-plan-now

Q4 results two largest profit boosters:

1) Significant improvement in Kraken operating efficiency at 90+% in 4Q. (per Enquest announcement)
2) Full recognization of RM18m/quarter maintenance cost savings of Perdana sale at the end of 3Q

I would expect core net profit to be >RM90m in 4Q, at least 20% growth over 3Q.
Your money, your call.
Goodluck.

Q4 results two largest profit boosters:

1) Significant improvement in Kraken operating efficiency at 90+% in 4Q.
2) Full recognization of RM18m/quarter maintenance cost savings of Perdana sale at the end of 3Q.

I would expect core net profit to be >RM90m in 4Q, at least 20% growth over 3Q.
Your money, your call.
Goodluck.

Goodluck.