Anybody got the updates from UOB, RHB etc?

Guys, please share the PDFs of research reports as you have them.

Net Profit to Shareholders: RMRM149.7m

Adjustments:
Net allowance for impairment: +RM4.5m
Reduction in residual vessels (fully owned): +RM25.9m
Reduction in residual vessels (JV and associates): +RM45.1m
Unrealised FX Gain: -RM8.2m

Adjusted Core Net Profit: RM217.0m

It appears that there are the following one-off to consider. The Q3 results are actually much better once you factor these in.

1) Net allowance for impairment: RM4.5m
2) Reduction in residual vessels (fully owned): RM25.9m
3) Reduction in residual vessels (JV and associates): RM45.1m

Solid set of results. Will comment further once I've gone through it.

Results usually announced Friday afternoon. So I expect it latest by this coming Friday.

Armada Sterling V has left the port!!! She is sailing to the Kakinada field as we speak.

All ready for sailaway!

https://ibb.co/WGjrVV7

Sailaway ceremony was held over the weekend at the yard in Singapore. The journey of Armada Sterling V to the KG DW 98/2 field should begin any day soon.

Some more news: https://energy.economictimes.indiatimes.com/news/oil-and-gas/shapoorji-pallonji-builds-floating-rig-for-ongcs-kg-wells/95287960

"Shapoorji Pallonji spokesman while refusing to divulge costing details told PTI that the vessel will be reaching the domestic waters sometime before December-end."

This is amazing news. Bumi Armada has been updating that sailaway readiness will be achieved in Oct 2022.

If true, it should start moving the price up once the FPSO actually begins moving out to India, and then again the price will improve with first oil. So lets see how it goes.

Some FPSO projects we know Bumi Armada has bid for/will be bidding for:

1) TotalEnergies Cameia (Angola) - Favourites
2) Eni Agogo (Angola) - Yinson is the favourite
3) Repsol Block 29 (Mexico)
4) Harbour Tuna (Indonesia)
5) ConocoPhillips Salam-Patawali (Malaysia)
6) Petronas Sepet (Malaysia) - FSO only

Based on further research, the above list is pure nonsense. M53 loadout was completed in October 2021, while M40 loadout was completed in February 2022. I can't find the date for M90 loadout. M54 was the final module to be loaded out in May 2022. So all have been loaded out.

Use LinkedIn, search "VME FPSO"

Robert this is your source: https ://oilandgas. world/viewtopic.php?t=96

VMEAP was awarded a contract from SPOG for 5 Modules:

M40 Produced Water Treatment Module (in production)
M51 Seawater treatment Modules (Shipped May 17, 2022)
M53 Chemical Injection Module (in production)
M54 Hydrocarbon Dewpoint and Gas Dehydration Modules (Shipped May 31, 2022)
M90 Metering Laydown Module (in production)

Note: UNKNOWN THE ABOVE STATUS AS OF WHAT DATE

-------------------

From LinkedIn: www[dot]linkedin[dot]com/posts/denis-brouwer-5303417_greentip-vme-tathong-activity-6940574032933064706-YU01/

Two years of hard work and the last module has been completed, loaded-out, sailed to Singapore and installed onto the FPSO. Congratulations to VME Process Asia Pacific Pte Ltd with this milestone, under the difficult circumstances during the last years. Thank you to all involved in this challenging project !

Robert where’s that comment from?

Bumi Armada's share price will still be stuck in the doldrums, as we need some official announcement before price can consolidate higher.

Things to expect:
1) Sailaway of Armada Sterling V (expected by Oct 2022)
2) Sale of Armada Claire (expected by Dec 2022)
3) Signing Mumbai FSRU binding contract (expected by Mar 2023)
4) Signing Cameia FPSO binding contract (expected by Mar 2023)

The above are not without risks. Armada Claire may be scrapped rather than sold, while no agreement might be reached for the Mumbai FSRU. They have been discussing since May 2021 with no outcome, so that might lead nowhere.

The big hope now is the sail away of Armada Sterling V, which according to various sources should not see any further delays, as well as the signing of a binding contract with TotalEnergies for the Cameia FPSO which should be done by Q1 2023 (though an LOI might be signed before the LOA).

Aside from the above, continued debt pare down, sale of the remaining 3 OSVs, and additional work in the Caspian Sea would help greatly in share price recovery. As a bonus, an additional contract win or two in the coming months that is not yet known about (either fully-owned or as a JV).

Currently Armada TGT FPSO is contracted until Dec 2024. The license expiry for the TGT Field was also supposed to be in Dec 2024.

However, in 2020, the field operators submitted a Full Field Development Plan (FFDP) to drill a further 6 wells (4 in 2021, 2 in 2022) and requested for a 5 year extension to the license. 2 year license extension was initially granted, so the field is operational until Dec 2026. But the operators have now submitted a further 5 year license extension request, up till 2031. The field is producing well, and the operator is minting money.

So a 2 years FPSO extension to 2026 is pretty much guaranteed, but it might likely remain contracted up until 2031. The FPSO will unlikely serve beyond that as it has a maximum design life of 20 years (started operating in 2011).

Will need to see some analyst updates next week on the potential impact of the new project on Bumi Armada's valuation. I'm estimating that SOP wise it would add roughly 10-15 sen to the share valuation, maybe slightly biased to the upside.

We also need news of the 98/2 FPSO (aka Armada Sterling V) sailaway, because for now, most SOP-based valuations have inputted a conservative valuation for the project owing to potential delays and start-up issues.

And of course, the sooner we hear about the sale of Armada Claire, the better.

What we do know is that the drilling is commencing for 2 new wells at the TGT field in Vietnam, and the FPSO charter is likely to be extended beyond Dec 2024. Looking at an additional 5 years there.

This is the full CIMB report: https://rfs.cgs-cimb.com/api/download?file=891b1e03-4e75-46a2-b686-92496b37d0c7

What paywall?

FINALLY! Seems like Bumi Armada is on the cusp of securing a contract win! This will be a EPC contract, so 2-3 years just designing, engineering and constructing the FPSO, before handing it back to TotalEnergies.

https://www.upstreamonline.com/exclusive/front-runner-emerges-to-supply-fpso-for-totalenergies-offshore-angola/2-1-1297568

Front runner emerges to supply FPSO for TotalEnergies offshore Angola

TotalEnergies has chosen its preferred contractor to provide a floating production, storage and offloading vessel for the Cameia-Golfinho project offshore Angola, which will be the first development in the Kwanza basin.

The French supermajor’s decision came just weeks after Eni and BP — which subsequently joined forces in Angola to form the Azule Energy joint venture — chose Yinson to supply FPSOs for the Agogo and Palas- Astrea-Juno (PAJ) projects, marking a much-needed resurgence in upstream activity in the country after years of falling investments.

Between them, the Cameia-Golfinho, Agogo and PAJ developments could boost Angolan production by more than 300,000 barrels per day — welcome news for a nation that in July became Sub-Saharan Africa’s biggest oil producer, surpassing Nigeria and averaging 1.177 million bpd.

Contracting sources in Asia and Europe told Upstream that Malaysian offshore contractor Bumi Armada is leading the race to land the deal for provision of an FPSO with production capacity of 100,000 bpd.

Bumi completed the front-end engineering and design work for the floater late last year and its commercial proposal is very competitive, sources said.

Some project watchers suggested TotalEnergies signed a letter of intent with the Kuala Lumpur-based FPSO player early this week, but this could not be confirmed.

“The LoI was scheduled for signing Monday, though it is not sure the signing ceremony took place,” said one source.

Another contact familiar with the tender process said: “I know they (Bumi) are leading and going ahead.”

Kuala Lumpur sources claimed Bumi has a conditional letter of award for Cameia FPSO.

Upstream understands there are expected to be several months of pre-engineering work on the FPSO before a formal award is made by February 2023.

The contract up for grabs is said cover engineering, procurement and construction, with TotalEnergies owning the vessel after delivery.

Saipem working with MISC was said to be other remaining bidder in the race, with the Malaysian rumour-mill suggesting MISC had high hopes for this job — especially with Saipem on board.

Also jostling for the prestigious job have been Technip Energies of France working with Malaysia’s Yinson.

Upstream understands the Technip Energies-Yinson group may have withdrawn from the bid process due to commitments elsewhere, not least on the two other Angolan schemes.

Bumi Armada borrowings are predominantly in USD. BNM OPR will have no impact, Fed rate hikes though, that's a whole other story.

Insiders are buying, big new contract win imminent

https://www.upstreamonline.com/exclusive/leader-emerges-for-eni-s-angolan-fpso-contract/2-1-1291456

Leader emerges for Eni’s Angolan FPSO contract

Malaysian floater specialist Yinson Holdings has emerged as the front runner for the engineering, procurement and construction contract that will deliver a floating production, storage and offloading vessel for Eni’s 1 billion barrel deep-water Agogo project, offshore Angola.

Multiple industry sources told Upstream that Yinson has edged out rival bids from fellow Malaysian player Bumi Armada and Italy’s Saipem with commercial offer and technical proposals for the Agogo FPSO.

Some sources said that Eni will sign a letter of intent with Yinson imminently, with a commercial contract likely to be be finalised later this year.

The Italian operator plans to use the unit to produce up to 120,000 barrels per day of crude for the second development phase of the Agogo field.

Yinson’s technical proposal centres on a conversion of a very large crude carrier.

In late 2019, the Malaysian FPSO player bought two VLCCs - the Ridgebury Eagle, owned by RidgeBury Tankers, and the Apollonia, owned by Neda Maritime Agency.

Apollonia, now named Hawk is being converted by Cosco into the Maria Quiteria FPSO, destined for the Petrobras-owned Parque das Baleias oil project offshore Brazil.

Some bad news, Yinson seems to have obtained Eni Agogo FPSO in Angola, which was one of Bumi Armada's main targets. Yinson's share price has jumped 5% today so there must be a high chance this is true.

Leader emerges for Eni’s Angolan FPSO contract

Malaysian floater specialist Yinson Holdings has emerged as the front runner for the engineering, procurement and construction contract that will deliver a floating production, storage and offloading vessel for Eni’s 1 billion barrel deep-water Agogo project, offshore Angola.

Multiple industry sources told Upstream that Yinson has edged out rival bids from fellow Malaysian player Bumi Armada and Italy’s Saipem with commercial offer and technical proposals for the Agogo FPSO.

Some sources said that Eni will sign a letter of intent with Yinson imminently, with a commercial contract likely to be be finalised later this year.

The Italian operator plans to use the unit to produce up to 120,000 barrels per day of crude for the second development phase of the Agogo field.

Yinson’s technical proposal centres on a conversion of a very large crude carrier.

In late 2019, the Malaysian FPSO player bought two VLCCs - the Ridgebury Eagle, owned by RidgeBury Tankers, and the Apollonia, owned by Neda Maritime Agency.

Apollonia, now named Hawk is being converted by Cosco into the Maria Quiteria FPSO, destined for the Petrobras-owned Parque das Baleias oil project offshore Brazil.

https://www.upstreamonline.com/exclusive/leader-emerges-for-eni-s-angolan-fpso-contract/2-1-1291456

Some interesting tidbit from the UOB report which has not be covered elsewhere, confirming my thesis that Bumi Armada does have the capacity to take on one large-scale FPSO project on its own without needing to do a rights issue:

1) With lower gearing, management guided that it can take on two new FPSO projects, or in detail at least one new large wholly-owned FPSO (US$1b capex) and 1-2 FPSOs on the JV level with Sharpoorji, without the need to incur additional equity fund raising. The higher FPSO opportunity opens up contracts that are favourable to BAB, like those with construction/maintenance scope only (no lease) that do not warrant heavy capex commitment. An example is FPSO Cameia in Angola (competing with MISC).

2) While still a beneficiary of gas projects, no update yet on Mumbai FSRU project. We note that lofty gas prices since the onset of the Russian-Ukraine war, have depressed the regas terminal outlook for India, which is a price-sensitive gas consumer. New regas capacity that may come on stream in 2022 in India had been cut materially from 17MTPA to 10MTPA. The most recent floating, storage, regasification unit (FSRU) Hoegh, which arrived at H-Energy’s Jaigarh terminal, did not get commissioned for its 10-year charter and had to leave India to look for short-term jobs.

3) • Despite having a 30-year licence for the 5MTPA Mumbai FSRU together with Sharpooji, we understand that the contract terms are still in negotiation stages with no actual construction being carried out yet. However, the absence of guaranteed term contract/offtakes, and clauses to protect against market conditions in a risky country, may impact the long-term sentiment of the project in our view. Still, Sharpoorji is co-sharing the project risk. Also unlike FPSOs which are purpose-built, it is easier to redeploy the FSRU to other LNG markets.

4) ESG: To decarbonise FPSOs and expand into green/gas projects. BAB’s new climate change policy underlines its commitment to expand into gas projects like FSRU and floating LNG vessels, and lower existing emissions and flaring. For the latter, there will be challenges on some of its existing FPSOs: An example is FPSO Kraken, where Enquest stated that the “FPSO is almost impossible to electrify” via power from shore or with floating wind technology (which requires stable grid connection), partly due to the swivel configuration. And time is running out to comply with the North Sea Transition Deal which dictates a 10%/25% emission cut targets by 2025/2027. Both Enquest and BAB are looking at creative solutions such as using drop-in biofuel, but the key uncertainty is whether such sustainable fuel will be commercially available.

Anyone have UOB Kay Hian research report on Bumi Armada? Appreciate if you could kindly share, thanks!

Shameful Bursa allowed a name change to a disgraced company.

Can anyone share the CIMB report please. Thanks!

AmInvest - RM0.83 (unchanged)

More highlights:

- Armada Sterling V (Kakinada 98/2 FPSO) - Over 90% complete as of June 2022. Planned sail away in Q4 2022.
- Only three OSVs remain; one is currently classified as an asset held for sale.
- Mumbai Port FSRU project is being progressed.
- Armada Claire to be sold in 2022.
- Bumi Armada has submitted tenders for FPSOs and will be active in select tenders in the future.
- Completed design of offshore CO2 storage and injection vessel – Floating Storage and Injection Unit (FSIU).
- Lukoil contract: Armada Constructor mobilized in June and commenced dredging, Armada Installer prepared for pipelaying work.
- In August 2022, the Group received notification from MENV that the secured term loan (USD30mil, due Q4 2022) will be extended by 12 months.


Overall, a very solid Q2 results I feel. Alas, we still need a big contract win to drive the share price significantly higher.

The Q2 briefing slide now states "Armada Claire to be sold in 2022." In Q1, it stated "Armada Claire to be sold or scrapped in 2022." I would take the change in wording that a buyer has been secured and sale is imminent.

Also, note that in the balance sheet, there is "Non-current assets and disposal group classified as held-for-sale" amounting to RM56m. This could refer solely to the one OSV classified as "held for sale", or both the OSV and Armada Claire.

The revenue and also debt is slightly distorted this quarter due to sharp depreciation of MYR against USD. Expect the same for Q3 2022.

Some interesting things to note:

1) Pre-FEED revenue was recognized during the quarter. This could be a strong sign that a FPSO contract win is imminent.

2) With the RM88 impairment on Armada Claire receivables, and with the vessel fully depreciated in Q1 2022, I believe that the entire Armada Claire saga is now negligible on the balance sheet.

Net profit attributable to shareholders: RM186.3m

Adjustments:

1) Net allowance for impairment losses: RM65.4m (RM88m impairment charge on Armada Claire, partially offset by what I believe is RM22.6m writeback on Armada Kraken following remarkable FPSO performance)

2) Unrealised FX gains: RM25.2m

Adjusted core net profit: RM186.3m + RM65.4m - RM25.2m = RM226.5m

Debt analysis: https://i.ibb.co/SR7b8nq/armada-2q22.png

Time series: https://i.ibb.co/sPb3Y7d/armada2q22-ts.png

Quarter results is confirmed for tomorrow noon. Although the buying trend these past few days could mean nothing, it can sometimes mean the insiders know a good result will be reported. Let us see. Not long to go now.

Repsol fires the starting gun for brand new FPSO project in Mexico

Spanish energy company Repsol has launched the process for securing a new floating production, storage and offloading vessel to anchor its planned offshore oil development in Mexico's Block 29, where the deep-water Polok discovery and a smaller find called Chinwol are located.

Floater market sources said Repsol intends to place a leased FPSO on Block 29 in water depths of between 460 metres and 600 metres, and later tie-in an adjacent area, referred to as Block X.

Multiple FPSO market sources said selected floater contractors have been approached to compete for a front-end engineering and design contract for the Block 29 FPSO.

FPSO contractors said to be looking at this opportunity include Bumi Armada, BW Offshore, MISC and Yinson Holdings.

Japanese floater giant Modec International already operates the Miamte FPSO in Mexican waters, under a charter with Eni. The Italian operator celebrated first oil on the Amoca-Mizton-Tecoalli oil and gas complex in February 2022.

Sources consulted by Upstream suggested that Polok opportunity might fall under the radar of the two biggest floater suppliers Modec and arch rival SBM Offshore, as the pair are focused on delivering bigger units for Brazil and Guyana.

Another potential floating production project involving a foreign operator in Mexico is Woodside's Trion joint venture with state-run oil company Pemex.

The Australian player has pushed back until next year a final investment decision for a development that would feature a planned 100,000 barrel-per-day semi-submersible production unit, from a previous FID target of 2022.

Medium-sized

According to market sources, Repsol’s Block 29 requirement is for a medium-size FPSO with oil production capacity for around 60,000 barrels per day of oil, plus associated gas production, and vessel size permitting either Suezmax or Aframax tanker dimensions.

The Spanish operator is receptive to either a conversion model or a redeployment of an existing vessel and featuring an external turret mooring system.

The lease and operate term could have a fixed term of 15 years with options for extensions, but the contractual period was still to be confirmed, said sources.

First oil from Block 29 is being targeted for 2026, and Block X is expected to start producing in 2027 or 2028.

Block 29 is located in the Salina basin, in the southern part of the Gulf of Mexico.

Block 29 discoveries

Repsol and its Block 29 joint venture partners announced the Polok-1 and Chinwol-1 discoveries in May 2020. They followed up that effort with more drilling in late 2021.

Polok-1 and Chinwol-1 had a net oil pay of 200 metres and 150 metres, respectively.

In September 2021, the drilling of the Polok-2DEL appraisal well was completed with positive results, said Repsol, which added that the evaluation of the well was key to sanctioning the project towards its development phase.

“Repsol thus becomes the first international company to carry out a test of these characteristics in deep waters in Mexico,” added Repsol.

Joint venture partner Wintershall Dea said the successful appraisal well had potentially opened up a new play within Mexico’s Salina basin.

German goal

Wintershall Dea is drilling a well of its own on the same trend, targeting the Kan-1EXP well in Block 30, a few kilometres to the north of Amoca-Mizton-Tecoalli field.

Drilling of Kan-1EXP is taking place in 50 metres of water using the jack-up rig Borr Ran, which is under contract until January 2023.

The full Block 29 partners are operator Repsol (30%), Petronas (28.33%), Wintershall Dea (25%) and PTT Exploration and Production (16.67%).

The partnership also drilled an earlier unsuccessful exploration well in 2021 called Chak-1.

https://www.upstreamonline.com/exclusive/repsol-fires-the-starting-gun-for-brand-new-fpso-project-in-mexico/2-1-1282743

Re-rating will only happen with a solid contract win. It might even re-rate once the Armada Sterling V begins operations in Q4 of this year. Without any catalyst, it'd be hard for any re-rating to occur as Bumi Armada is facing a rapidly dwindling orderbook every passing quarter.

Results out on Friday noon. I’m expected a solid set of results. Net profit of at least RM200mil for the quarter. The operating FPSOs have had great performance, especially Kraken. Maybe some positive developments on Armada Sterling V which is on course for a October 2022 sail away based on Sembcorp Marine’s recent results. Plus one or two additional good news (Armada Claire status, Mumbai Port FSRU status, new project etc).

Any idea when are the results due?

During the first half of 2022, average gross production was 27,698 Boepd, which is above the top end of full year guidance of 22,000 to 26,000 Boepd. The floating, production, storage and offloading vessel continues to deliver top quartile performance, with production efficiency of 92% and water injection efficiency of 95%.

https://www.enquest.com/media/press-releases/article/operations-update-14

Anybody got full link to Mkini expose on TGlov?

Yinson has got BP Angola FPSO (no contract yet, but exclusivity discussion stage now). With that, it should put Bumi Armada the prime candidate for Eni's Angola FPSO. Yinson is kinda stretched at the moment with up to 4 ongoing projects. Bumi Armada just has one ongoing project which is almost the finishing line (Armada Sterling V in India).

Still awaiting the following good news (the sooner, the better!):

1) New contract secured in Angola (Agogo field operated by Eni)
2) Finalisation of the Mumbai Port FSRU project contract
3) Sale of FPSO Armada Claire
4) Sail away of FPSO Armada Sterling V

These need to happen for the share price to move up. Otherwise, there will be no reason for it to move. Of course may have other good (maybe even bad) news that are unforseen, but these 4 are the key expected things to look out for in the short term.

Victorious: Woodside wins FPSO legal wrangle

https://www.upstreamonline.com/rigs-and-vessels/victorious-woodside-wins-fpso-legal-wrangle/2-1-1244905

Armada Angola job win announcement is due soon. Share price weakness is unprecedented. I topped up at 0.41, no bullets left now.

At least four specialists in the floating production, storage and offloading vessel industry are hoping to qualify for the bidders’ list for Harbour Energy’s Tuna FPSO opportunity in Indonesia’s Natuna Sea.

A turret-moored FPSO is part of the basecase development concept for the project, along with an offshore wellhead platform hosting the production wells.

There are at least four FPSO contractors which are in the running to be selected for Harbour’s bidders’ list for the FPSO including Bumi Armada, BW Offshore, HBA Offshore and Yinson Holdings, and possibly others, according to market sources.

Bumi Armada and BW Offshore both have experience in Indonesia as they have provided FPSOs there in the past.

It is understood that pre-qualification documents have been submitted to Harbour, and the UK-based operator will assess those documents prior to deciding which companies will bid for the lucrative FPSO contract.

Leased FPSOs contracts are typically multi-year charter agreements with the possible addition of an operations and maintenance arrangement.

Market sources said the potential Tuna bidders are offering either existing FPSOs that would be upgraded or conversion solutions whereby a tanker is converted into an FPSO.

The turret mooring system, which holds the FPSO in position and acts as a conduit for the oil and gas production, will be provided by a specialist contractor.

Companies with a track record in Asia including Bluewater, London Marine Consultants and Sofec are understood to be in contention for the Tuna turret mooring contract, said sources.

The Tuna block hosts at least two discoveries — Kuda Laut and Singa Laut — in water depths of up to 120 metres.

The block contains more than 100 million barrels of oil equivalent on a gross basis of which 55% is gas and 45% is liquids.

Harbour recently said it aims to submit an initial field development plan to the Indonesia authorities later this year.

Front-end engineering and design will then get under way, at which point the FPSO contracting, and other contracting processes, are likely to pick up pace.

Harbour said in its March 2022 results that the final investment decision is targeted in 2023.

Harbour also said first production from Tuna would be possible three years after the final investment decision at an initial rate of between 40,000 and 50,000 barrels of oil equivalent per day.

The Tuna production sharing contract is located in the Natuna Sea off northern Indonesia close to Vietnam’s maritime boundary. The plan for the produced gas is to supply Vietnam via a subsea pipeline.

Harbour’s early technical and commercial work has showed that capital expenditure and operating expenditure based on a leased FPSO would be between $20 and $22 per boe. The project will have a breakeven cost of $25 per boe.

Pre-FEED work has been completed by Indonesia’s Synergy Engineering.

Harbour’s 50:50 joint venture partner in the Tuna PSC is Russia’s Zarubezhneft and, in March, Harbour said it was looking at its options regarding Zarubezhneft’s participation depending on how the Russian invasion of Ukraine developed.

Harbour also said at the time the Russian company was paying its bills and the pair were working together on the plan of development.

There has been no substantial change in the situation since then, according to well-placed market sources, with Zarubezhneft still a 50% supportive partner in the project.

Following the drilling of two appraisal wells on the Tuna project in late 2021, Sergey Kudryashov, general director of the Zarubezhneft Group, said Zarubezhneft had been the first Russian oil company to receive support from the Indonesian government in offshore development.

https://www.upstreamonline.com/exclusive/fpso-contractors-angling-for-indonesian-project/2-1-1238466

Added at RM0.41

Bumi Armada stock price will never fail to confound me. Oil is trading at near record high levels, with supply set to be constrained for years/decades to come. More and more marginal fields are due to be developed using FPSOs going forward. The opportunities in the FPSO market are aplenty, and Bumi Armada is finally in the right place, financially-speaking, to take advantage of these opportunities. On top of that, there is a booming FLNG/FSRU and other green floating platforms market out there that Bumi Armada is also hoping to tap into. The company has cut its fat (read, the OSV vessels), reduced debt significant and can now re-gear when the need arises. Operationally, all its floating assets are sound. The performance at Kraken over the last 24 months has been admirable, given the dire situation in the 2017-2020 period. Additionally, Kraken and TGT1 are highly likely to see their contracts extended in 3 and 2 years time respectively.

I can't and won't make share price predictions, but Bumi Armada is severely undervalued at current levels. Why? I have no idea.

Quite inexplicable the share price movement. It's as if there is no positive, and in fact many negatives, priced into the share price.

Then again, if the share price continues to hover at around RM0.40-RM0.42 I might increase my position.

Balance sheet risks are no longer a concern, and the company is now all set to grow. Discounting all that, just looking at what Bumi Armada is already doing, and we're still rather undervalued. Add to the fact that Armada TGT will be renewed, as will Armada Kraken, I am just lost for words.

Based on current orderbook, revenue is expected to continue falling. Armada TGT lease revenue is recognised on a decreasing basis. I know Armada Olombendo and Armada Mediterenia revenue is recognized in a straight line basis. I'm unsure if Armada Kraken revenue recognition is decreasing or straight line. Armada TGT lease expires in 2024, Armada Kraken firm charter period expires in 2025.

OSVs have been practically sold (only 3 left, from 40+ just a few years ago), so revenue contribution from them will continue falling too.

Bumi Armada has two projects in hand, Armada Sterling V (for 98/2 project) and Mumbai Port FSRU. For both projects, the revenue will NOT be recognised by Bumi Armada, as they are accounted for as associate and JV respectively.

As such, given how things stand, revenue has pretty much flatlined, and will likely be falling in the coming years. But curiously, the net profit will continue inching up due to lower finance cost (as loans are pared down), lower depreciation charges and higher profit contribution from associates/JVs as the two new India projects come on stream.