As I had shared before, the Mumbai Port FSRU project is officially scrapped as it is no longer economically viable given the run up in LNG prices.

CEO Gary says that he will be travelling to Almaty, Kazakhstan to participate in talks with potential clients there. He is going on 30th June 2024. He sounded very upbeat and positive about prospects from the Caspian region for the SC vessels, and singled out Kazakhstan as a likely destination for their next contract win. In another reply to MSWG questionnaire, I believe they mentioned there is USD2bil potential SC contracts to bid for between 2024-2026.

CFO Luke also spoke about the renegotiated O&M contract with Eni in Angola, and mentioned a positive contribution of RM60mil to Q1 2024 revenue. However, I am unsure if this is one-off in nature or recurring every quarter moving forward.

Some information on Kojo joint study.

https://www.ruangenergi.com/ketika-lavender-dan-kojo-di-joint-study-kan-lemigas/

Gary spoke about Kojo field, explaining that Bumi Armada has "first refusal" and have enquiries from potential partners on the field development. Very brief, nothing much more to it. He didn't speak about the Talu field, but I believe it is also in Indonesia.

@MM78 no the Armada Kraken is not fully amortized at the end of the firm charter. If I recall correctly, they showed the amortization schedule in the previous quarter and it was previously on a fixed line basis to the end of the option charter period. They made some adjustments which resulted in the massive impairment in Q4 2023, but the vessel will still only be fully amortized in 2042.

Does anyone have any screenshots or recording from the AGM? I also missed some of the written questions from MSWG and shareholders (including myself)

@MM78 care sharing more about the question you're referring to from the AGM on building the cash pile instead of paring down debt. I missed it, only heard the question being read but not the answer.

$2bil worth of tenders in the Caspian Sea for the two subsea construction vessels.

One big nugget is that Armada Sterling V acceptance is expected in June 2024.

Discussions are ongoing to extend Sterling II, TGT and Kraken FPSO contracts.

Anybody attended the AGM? I missed the Q&A.

Point to note, they are borrowing USD400mil (RM1.85bil) to repay the existing Sukuk facililty of RM1.5bil.

1. Why is the new borrowing more than the old borrowing? Why does Bumi Armada need to borrow MORE cash?
2. Usually lenders want the borrowings backed by some project. What are they backing this with?

Armada TGT FPSO - The Group is in discussion with the charterer for extension beyond Nov 2024.

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Finally, official acknowledgement that discussions are ongoing to extend the charter period.

In any case, this is Bumi Armada's best ever reported quarterly net profit. Congrats to those who've been in for the long haul!

"Operations segment increased mainly due to higher revenue from Armada Olombendo FPSO resulting from resolution of outstanding issues with the charterer which includes escalation of the operating fee pursuant to the charter agreement."

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It appears that the O&M contract with Eni has been revised higher, presumably due to escalating costs in the past couple of years.

The Group holds a 30% interest in associates involved in the 98/2 Project. Armada Sterling V FPSO is currently in the progress of performing the necessary tests to achieve final acceptance which is required for the vessel charter to commence. During this start-up phase, the associates are entitled to certain revenue, but the charterer has withheld certain amounts from payments pending ongoing discussions regarding this and additional outstanding claims that are being worked on to achieve resolution.

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We are still waiting for first gas, let alone final acceptance. Might still take a while.

We are pursuing new opportunities in targeted markets. We will continue to focus on the following;

• Safety and health of all employees, partners and assets;
• Improve the operational performance of our vessels;
• Maintain and further develop effective relationships with our clients and partners;
• Secure new projects in core regions and with our preferred partners;
• Building our energy transition pathway towards achieving net zero goal by 2050 or earlier, by focusing on carbon emission reduction and carbon injection technologies and solutions including the Bluestreak joint venture; and
• Explore complementary business opportunities in the upstream sector.

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Same sh!# as before!

I'm looking forward to hearing CFO Luke later. Watch out for his pronunciation of "millions", which he pronounces as "minions".

And also good guy Gary. Not the greedy one, but the safety guy. Very nice chap.

This quarter, they only repaid RM122mil in borrowings as most of the borrowings have been either repaid or restructured to a longer-term. At the same time, their cash pile has swelled by RM197mil.

Logic dictates that if they had nothing coming up, they should've just repaid the term debt that was restructured last year, as the cash pile is earning significantly less than the interest on the debt. However, they didn't do that - do they know that they will be needing cash for certain project(s) real soon and are building up their warchest accordingly? After all, CFO Luke is a rather capable man.

The stock is trading at a 3.5x P/E ratio. Even if this is a sunset company, the cash generation potential is huge. It's still undervalued by 20-30%.

Now if the company can somehow secure contracts, only the sky is the limit.

Core net profit is around RM138.5mil after accounting for RM0.9mil reversal in bad debts and RM0.7mil insurance claim.

On 16 January 2024, Armada Upstream Investment B.V. (“AUIBV”), a wholly-owned subsidiary of the Company, incorporated Armada Akia Holdings B.V and Armada Talu Holdings B.V. (“ATHBV”) to participate in, manage and supervise businesses and companies involved in the Akia Work Area and other potential new ventures in Indonesia.

On 17 January 2024, AUIBV incorporated Armada Kojo Holdings B.V. to participate in, manage and supervise businesses and companies involved in other potential new ventures in Indonesia.

On 17 January 2024, ATHBV incorporated Armada Talu B.V. to undertake potential upstream exploration and production projects in Indonesia.

On 18 January 2024, Armada Etan Limited, a wholly-owned subsidiary of the Company incorporated Armada Kojo B.V. to undertake upstream exploration and production projects in Indonesia.

Net profit is at RM240mil. The RM263mil includes RM23mil profit attributable to those who are not shareholders of the company (i.e. shareholders of non-100% held subsidiaries).

This looks like a clean RM240mil profit with minimal adjustments needed.

a. RM0.9mil impairment written back
b. RM10.2mil unrealised FX loss

The share of results of JV is heavily being understated due to losses from Armada Sterling V wiping off profits from other JV operations. There might be a "hidden" profit of RM30mil to RM50mil per quarter here once they sort out Armada Sterling V.

Keep in mind that this is going to be the "best year ever". We should hit RM1bil in net profit this year, assuming no surprises. But note that next year onwards, profits will only get lower as Kraken lease enters the option period, and then Armada Sterling III lease enters option period in 2027. We are still pending news of further renewal for Armada Sterling II lease which is now in the first option year, while Armada TGT contract is due to expire in Q4 2024.

As always, for today's quarterly result, hope for the best but prepare/expect the worst. "Normal" profits should be in the range of RM220mil to RM260mil. Might even overshoot the top end slightly as Q1 forex was favourable and we should be getting some contribution from Armada Sterling V, as well as lower depreciation expenses post kitchen sinking in Q4 2023. Just pray and hope there are no nasty surprises in there.

Thirai, that's absolutely true. The focus 1 to 2 years ago was to get the ship in order. That's been achieved. What's deflated my expectations on Bumi Armada is that they're simply uncompetitive in getting new contracts (at least on the FPSO side of things). There has been much talk about going into gas and carbon capture solutions for the past 2 years, thus far management has failed to deliver.

Two years ago, the share price was hovering at the 30 to 40 sen range. It was not necessary for the company to win new contracts for the share price to move up. This has ended up being true.

Now for the next leg up, there need to be some wins. Bumi Armada was frontrunner for the Cameia FPSO job, they hired a full project team of expensive workers in anticipation, but turns out they couldn't eventually deliver at the price they'd bid at. Some RM50mil to RM100mil has been "wasted" on gas and carbon FEEDs which might well amount to nothing.

Again, at these price points, Bumi Armada is still worth considering. But short of new wins, the long-run ceiling price of the stock will be in the 70 sen range.

Do not expect to learn much, if at all anything, during tomorrow's AGM. I've submitted a handful of questions, let's see to what level of detail they provide answers/explanation.

Most of the guys who'd engage in constructive discussion are gone. Now mostly those looking to make a quick buck

@Robert, they have nothing. I have asked them a direct question for AGM, see if they respond.

www.bumiarmada.com/wp-content/uploads/2024/04/Our-Journey-.mp4

Rohan, calm your tits will ya. PAT will be in the region of RM200mil - RM250mil. Anything below RM200mil will be a disappointment.

I believe those are stock options. The exercise price is at RM0.6002.

Nobody ought to care about quarterly results anymore. If anything, there are more hidden risks than there are hidden rewards in there. New contracts - that's the mantra we ought to live by. Things are rather disappointing on that front I'd have to say.

Results out on AGM day (at noon).

www.bumiarmada.com/business/

This seems new:

In 2023, Bumi Armada was granted the Akia PSC, which spans an area of 8,394 square kilometers and encompasses the Aster and Tulip oil and gas discoveries, estimated to contain 860 BCF of gas and 60 MMboe of oil and condensate.

We have recently acquired new 3D seismic data to assess the potential for a fast-track development. The success of this initiative holds significance in shaping our standing in the upstream sector of the oil and gas industry.

If the Pharos COO was right, we should get news of the TGT FPSO extension real soon.

I hope Gary doesn't take our needling to heart. However, the fact remains Bumi Armada is unable to secure new business. If so, the best course of action would be to downsize the staff and remove the fluff - just focus on the core operations. We'd be in for a windfall if they switched focus.

Gary's greed knows no bounds. He's issuing more shares for himself, at the expense of all other shareholders.

Not sure, but I reckon it'd be relatively small. Not as lucrative as a FPSO contract for sure. Maybe something like the LNG FSU in Malta that they have.

Uniper's Grain Power Plant FCSIU is incoming. It's in the annual report. Not sure when though, could still be year(s) away.

Anybody find any other interesting nuggets, please share

On page 30, they claim to have "achieved":

1. Expand LNG re-gas business
2. Development of offshore carbon sequestration business

On page 18, they claim that there are multiple paid FEEDs centred on CO2 storage and injection vessels in progress.

On page 19, they claim to shoot a 3D seismic over Tulip (in Akia block) and will acquire other upstream assets that will need floating solutions in the success cases.

However, no specific update on:
1. Mumbai FSRU - From my sources, this project has been scrapped
2. Bluestreak CO2 - Still work in progress, nothing concrete yet
3. Madura FLNG - No update, project might not be viable

Quite a pointless annual report. Nothing significant.

Major highlights:

1) Two new upstream assets/fields have been acquired - Kojo and Talu

2) USD400mil financing has been secured (binding agreement) to refinance RM1.5bil debt.

3) Nothing about new projects whatsoever.

Bumi Armada is venturing deeper into upstream oil & gas. In addition to Akia, they are working on Talu and Kojo fields.

Sadly Bumi Armada is opting for e-AGM once again. It would've been better for shareholders face Greedy Gary in person and ask him pointed questions to his face, about his unending greed to richly reward himself at the expense of the shareholders.

Big week up ahead!

Greedy Gary has taken too much for himself, and left not much for the rest.

He is the reason Bumi Armada is decaying.

Hopefully, AK will awake from his slumber and shake things up at the top of Bumi Armada.

Greedy Gary has gotten too comfortable in his position.

LMAO they work just half-day on Friday. Intern says it is a relaxing environment, this not good for us.

The second review says no projects. Also, not good for us.

Reviews from Glassdoor

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Relaxing!

Pros

Relax culture, you can get to know everyone in the company, KLCC view, half day on Friday, 10 mins walk from public transport (LRT)

Cons

Could be better on the employee & career development structure.

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Bonus payout is considered low as compared to peers

Pros

Friendly environment, rarely working overtime

Cons

No projects. Transparency between upper management and employees is low

Advice to Management

Provide more profit sharing to the employee to retain the talent

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The 2023 Annual Report should be out in the coming days. Hopefully there are some concrete, positive developments hidden in there.

Regardless, we need some positive announcement specifically relating to a concrete contract win by June 2024. Otherwise, be prepared to write-off Bumi Armada.

If you read the recent Glassdoor review, it seems like a company without any future potential. Such a sad state of things. Gary must be held accountable for this debacle!