Bumi Armada Profit Slips

Malaysia-based international offshore oilfield services provider, Bumi Armada Berhad, announced revenue of RM2.4 billion for the year ended 31 December 2014, a 16% increase over the RM2.1 billion secured in FY 2013.

For FY 2014, the Group registered EBITDA of RM884.4 million, down by 11%, as compared to RM994.2 million in FY 2013. The decline in EBITDA was mainly due to higher cost of sales of RM1.7 billion in FY 2014, which increased by 30%, over the RM1.3 billion registered in FY 2013.

Net profit for the year fell to RM218.7 million from the RM431.2 million recorded in the previous year, due to weaker contributions from the OSV and T&I businesses as well as impairments for available-for-sale financial assets and allowances for trade receivables, which amounted to approximately RM97 million. The Group also recognised cost relating to additional work on an on-going FPSO.

Meanwhile, revenue for Q4 2014 increased to RM701.8 million, versus RM556.7 million year-on-year, but the Group registered a net loss of RM52.6 million, against a net profit of RM88.3 million in Q4 2013, due to the allowances and impairments.

Commenting on the 2014 financial results, Acting Chief Executive Officer and Executive Director, Chan Chee Beng said, “The Company’s revenue grew 16% in 2014 with all three core segments registering healthy growth. With the deterioration in oil prices and increasing challenges in the market, we felt it was prudent and necessary to make allowances for some trade receivables that we assessed to be at risk going forward.

“Notwithstanding this, we intend to enforce our contractual position and pursue collection of outstanding receivables. We remain focused on executing and delivering our three FPSO projects which are under conversion, as well as managing our OSV and T&I businesses through what will be a challenging year in 2015. We have initiated cost reduction (which would include headcount rationalization) and capital budgeting measures to enhance our productivity and efficiency.

“The FPSO, OSV and T&I businesses continue to generate positive contributions to the profits of the Company and we continue to execute on our firm orderbook of RM24.5 billion and the Company remains financially stable, with a cash balance of RM3.3 billion, helped by the Rights Issue which raised RM1.9 billion, and a healthy debt to equity level of 0.9 times. The Company also generated positive cash flow from operations of RM680 million in 2014.”

The Bumi Armada Board has proposed a tax exempt final cash dividend of 1.63 sen per share for the financial year ended 31 December 2014, which is equivalent to a pay-out ratio of 44% of Net Profit.

(1 Malaysian Ringgit equals 0.28 US Dollar)

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