Hot Stock Bumi Armada rises on financials, vessel deliveries

Hot Stock Bumi Armada rises on financials, vessel deliveries
Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Wednesday, 21 August 2013 10:53

KUALA LUMPUR (Aug 21): Bumi Armada Bhd saw its share price rise in morning trade on Wednesday following the announcement of the group's quarterly financials yesterday.

"Bumi Armada’s 1HFY13 net profit of RM22 million was generally in line with expectations, accounting for 43% of our FY13F earnings and 41% of street’s RM525 million estimates," said AmResearch in a note today.

At 10.51 am, Bumi Armada was trading 15 sen higher at RM3.90 with 255,700 shares done. It was one of the top gainers across the exchange.

Yesterday, Bumi Armada posted a 21.8% surge in net profit to RM111 million from RM91.9 million for its second quarter on increased activities across its business sectors.

The higher profit was on the back of an increase in revenue to RM481.2 million, against RM384.6 million a year ago.

AmResearch upgraded its rating of the group to 'buy' from 'hold' and also raised its target price to RM5.15 from RM4.30 previously.

"Bumi Armada's rerating prospects stems largely from the imminent and improved visibility of three FPSO vessel charters, which will be announced by the end of next month," it said.

Yesterday, the group also announced that it expects to take full delivery of four platform supply vessels worth some US$80 million, from Sentinel Offshore (L) Ltd by the fourth quarter this year.

The contract for the four vessels are part of the group's offshore support vessel fleet expansion programme.
"Management indicated that Bumi Armada is actively involved in tenders for 12 overseas FPSO and 5 floating storage regassification unit (FSRU) charters - potentially underpinning an upward rerating cycle for consensus earnings in FY14F onwards," it added.