Posted by nikicheong > 2024-02-28 12:47 | Report Abuse

“ Even though there has been no change to the contracted charter cash flows,
adjustment to the carrying value of Armada Kraken FPSO (impairment) was required
in Q4 2023 mainly due to the impact caused by accounting depreciation recognised
on a straight-line basis and the reduction in the charter revenue during the optional
extension period.”

Surely this amounts to accounting fraud? Armada Kraken’s carrying value has been inflated all this while. No changes to contractual terms. The lease revenue dropped was known right from the beginning!

Posted by Albukhary > 2024-02-28 12:47 | Report Abuse

Oh no... Big Loss.. Hope not drop below 52sen.

Posted by ITreeinvestor > 2024-02-28 12:52 | Report Abuse

historical high operating profit RM386,291,000 before impairment.
Let's wait for next quarter to fully reflect armada potential along with sterling V contribution

Posted by RJ87 > 2024-02-28 12:52 | Report Abuse

queue buy 40sen

Posted by Balian de Ibelin > 2024-02-28 12:53 | Report Abuse

no worries
just limit down 30 sen for you to enjoy!!!

60 sen - 30 sen limit down = 30 sen 😁

Keep Calm and Keep Buying.
Next QR more massive losses, drop to RM0.02 per share

Posted by RJ87 > 2024-02-28 12:53 | Report Abuse

Want delete msg?

-----------------------------
ITreeinvestor

last chance to buy below RM0.60
No more discount After 12.30pm

55 minutes ago

Posted by Ninja _07 > 2024-02-28 12:54 | Report Abuse

Revenue high .. but high cost too

Posted by nikicheong > 2024-02-28 12:56 | Report Abuse

If discounting the impairment, the Q profit would’ve likely been above rm200mil, maybe touching rm300mil even. I need to do a proper analysis later, am out now.


Of course the other good thing is with the impairment, there will be lower depreciation expenses going forward.

Posted by Balian de Ibelin > 2024-02-28 12:59 | Report Abuse

agree
yeah your house burned down so no more electricity expenses going forward. 😁

Posted by OrlandoOilWeb3AI > 2024-02-28 12:59 | Report Abuse

So Kraken over built is true Can never realize its full potential

Timing of impairment is suspect

Posted by RJ87 > 2024-02-28 13:01 | Report Abuse

I think discount all the way below 50sen...

Posted by Balian de Ibelin > 2024-02-28 13:02 | Report Abuse

thats also like both your parents suffered 100% burns and died and so you saved on feeding costs going forward. 😁

Posted by RJ87 > 2024-02-28 13:03 | Report Abuse

Here I follow few fellas judgement. Nikicheong and singor. They both do good analysis.

It's gonna drop all the way below 50sen anyway, now just a matter of it's a good chance to enter and at what price. See what nikicheong say on the actual profit from operation.
_____

nikicheong

If discounting the impairment, the Q profit would’ve likely been above rm200mil, maybe touching rm300mil even. I need to do a proper analysis later, am out now.


Of course the other good thing is with the impairment, there will be lower depreciation expenses going forward.

Posted by Mkt888888 > 2024-02-28 13:06 | Report Abuse

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=227104&name=EA_FR_ATTACHMENTS

Posted by Gabriel Khoo > 2024-02-28 13:06 | Report Abuse

Sukuk Murabahah of RM1,500.0 million is classified as current liabilities as the repayment is due within 12 months from the balance sheet date (i.e. September 2024). The Group is confident that the Sukuk Murabahah will be refinanced based on the following: there is sufficient time to conclude the new financing, positive indications received from the financiers, and the Group’s strong operating cash flows and significant cash holdings. As of the date of this Report, the financiers are in the process of obtaining the approval from the credit committees to support the new financing. The Group expects to conclude the new financing within the next few months. (3) The Group has successfully secured a syndicated term loan facility for USD105.5 million (RM484.7 million) (“the Syndicated Term Loan”) with a final maturity of 25 September 2028, to refinance the previous term loan facility. As the Syndicated Term Loan is repayable over 60 months, the amount due more than 12 months from the balance sheet date has been classified as non-current liabilities.

Posted by Sslee > 2024-02-28 13:06 | Report Abuse

70% reduction in Kraken FPSO lease rate from 1 April 2025.

nikicheong Guys, the reduction in Kraken FPSO lease rate for the option period is known long ago.

Link: https://www.bursamalaysia.com/market_information/announcements/company...

Simplified calculation:
Firm: USD1,400mil for 8yrs = USD175.00mil/annum
Option: USD924mil for 17yrs = USD54.35mil/annum

54.35/175 = 31.1% (i.e. reduction of 68.9% which matches Enquest's statement)

Note: When the contract runs into the option period, the asset is almost fully depreciated and the loan fully repaid. So while the revenue is 70% lower, the profit margins will be higher, and thus the impact to net profit contribution from Kraken would be lower than 70%.
15/02/2024 3:55 PM

The depreciation for year 2023 RM 333,470,000. Anyone know what is the carrying value for Kraken?
1 April 2025 is just 13 months away.

Posted by Gabriel Khoo > 2024-02-28 13:10 | Report Abuse

Net debt 3.65B

Posted by nikicheong > 2024-02-28 13:10 | Report Abuse

There are some funny hidden losses here. If you look at share of results for JV for “Others” segment in Q4 2023 (Page 15), there is a staggering loss of RM56mil.

This likely is related to front-loaded expenses for the Akia JV and/or Bluestreak JV. Good thing cause it shows there is some progress, though not mentioned explicitly.

Posted by OTB > 2024-02-28 13:11 | Report Abuse

I take a quick look into the results.
Ebitda = 386 million profit ( historical high operating profit).
Impairment loss = (514) million.

If without impairment loss, there is still an operating profit.
Thank you.

Posted by nikicheong > 2024-02-28 13:13 | Report Abuse

There is also this statement: “… resolution of outstanding issues with a charterer which resulted in higher revenue and a reversal of accrued costs.”

No clarity on what this refers to!

Posted by Balian de Ibelin > 2024-02-28 13:13 | Report Abuse

shud have sold when at 60 sen, was there a lesson there somewhere?
INSAS all over again.
Got profit take profit 😁

Posted by nikicheong > 2024-02-28 13:14 | Report Abuse

There is also reversal of impairment of RM36.4mil. No information about this whatsoever.

So many hidden things that are not addressed by management.

Posted by ITreeinvestor > 2024-02-28 13:17 | Report Abuse

Moving forward, we continue to explore ways to enhance shareholder value
including new projects and possible corporate activities.”

Posted by ITreeinvestor > 2024-02-28 13:18 | Report Abuse

Does this mean bonus share, dividend in near term?

Posted by Robert Waters > 2024-02-28 13:29 | Report Abuse

HUGE loss and impairment like the one during the worst days of Kraken delays.
Greedy Gary in utter deparation starts talking future projects. Only now he realizes that something needs to be done ?
_______________________________________________
Moving forward, we continue to explore ways to enhance shareholder value including new projects and possible corporate activities.”

Posted by nikicheong > 2024-02-28 13:30 | Report Abuse

Roughly rm250mil reduction in net debt.

Posted by nikicheong > 2024-02-28 13:32 | Report Abuse

Everything looks good except for the impairment. Too many impairments done for Kraken and SC vessels. Now all research houses will mark down target prices cause you never know when more impairments are due. Especially for Armada Olombendo.

Posted by OrlandoOilWeb3AI > 2024-02-28 13:32 | Report Abuse

Best hope for the price is existing shareholders see eye to eye that past is past

Posted by nikicheong > 2024-02-28 13:32 | Report Abuse

As investors, we must discount some of Bumi Armada’s net asset value as it might be overstated.

Posted by Felix888999 > 2024-02-28 13:35 | Report Abuse

Aiyoh hope to get another Ang Pow, look like burst already. Luckily locked an Ang Pow before CNY.

Posted by Balian de Ibelin > 2024-02-28 13:47 | Report Abuse

The market value of oil assets are going down more rapidly than depreciation budgeted for.
Impairments are provided when 1) asset is not used or 2) when projected revenue profitablility returns are way less than terminal asset values plus scrap values.
Likely many oil assets will be permanently locked down forever.

Posted by s3phiroth > 2024-02-28 13:48 | Report Abuse

Limit down inkambing!

Posted by nikicheong > 2024-02-28 13:51 | Report Abuse

I won’t be surprised if this is just a blip. After all the impairment charges are completely non-cash in nature. The cash generating power of the business was the best it has ever been in Q4 2023

Posted by nikicheong > 2024-02-28 13:55 | Report Abuse

Operating cash flow before changes in working capital for Q4 2023 was a staggering RM455mil. By far the highest ever in any given quarter.

Posted by ITreeinvestor > 2024-02-28 13:58 | Report Abuse

and yet greedy Gary still not willing pay out any single cent for dividend

Posted by nikicheong > 2024-02-28 14:01 | Report Abuse

Core net profit to shareholders (after adjusting for net impairment): RM312.4mil

Posted by nikicheong > 2024-02-28 14:29 | Report Abuse

The investor presentation goes into some detail on the impairment adjustment. On the whole, I think it’s still a positive quarterly results.

Posted by nikicheong > 2024-02-28 14:29 | Report Abuse

www.bumiarmada.com/wp-content/uploads/2024/02/Q4-2023-Results_IR-deck_Full-Version_vF.pdf

Posted by ITreeinvestor > 2024-02-28 14:33 | Report Abuse

now the question will be, what about for the rest of FPSO which firm charter ending soon

Posted by nikicheong > 2024-02-28 14:34 | Report Abuse

ITreeinvestor none else ending soon, so no other near term risk of the same thing recurring. Next is still 3 years away and is a JV vessel

Posted by nikicheong > 2024-02-28 14:34 | Report Abuse

What a bloodbath!

Posted by ITreeinvestor > 2024-02-28 14:37 | Report Abuse

Sterling II end Mar24

Posted by Ninja _07 > 2024-02-28 14:46 | Report Abuse

Whoaaa...! Drop to 0.54

Posted by MM78 > 2024-02-28 14:49 | Report Abuse

Market reactions are not as bad as I was expecting.

Posted by sheep > 2024-02-28 14:51 | Report Abuse

Cut lost cut lost buy back at 48 sen..

Posted by MM78 > 2024-02-28 14:51 | Report Abuse

may need 2-3 quarters of good results to restore market confidence .

Posted by rohank71 > 2024-02-28 14:54 | Report Abuse

look at cashflow

Posted by rohank71 > 2024-02-28 14:54 | Report Abuse

BA is not an asset company la.. asset is just accounting. what's important is the cashflow and debt outstanding. as long as Cashflow is strong why worry abt asset. I rather BA write offball asset one time and just collect money without anymore depreciation.
even company got asset and no cashflow who wants. BA earned 1.5B cashflow in 2023.. isn't that good enough?

Posted by rohank71 > 2024-02-28 14:54 | Report Abuse

at 50 buy

Posted by super911 > 2024-02-28 14:55 | Report Abuse

One impairment all naik car