Higher expansion costs squeezed Bumi Armada’s 2Q profit
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Higher expansion costs squeezed Bumi Armada’s 2Q profit
Higher expansion costs squeezed Bumi Armada’s 2Q profit |
Business & Markets 2014 |
Written by Kamarul Anwar of theedgemalaysia.com |
Thursday, 21 August 2014 09:52 KUALA LUMPUR: Oil and gas (O&G) service giant Bumi Armada Bhd saw a 12.13% drop in its net profit for the second financial quarter ended June 30, 2014 (2QFY14) to RM98.38 million from the previous corresponding quarter’s (2QFY13) RM111.97 million, on higher expansion costs. Its revenue rose 22.62% to RM590.08 million from RM481.23 million in 2QFY13, its filing with Bursa Malaysia yesterday showed. The group did not explain the year-on-year (y-o-y) drop in the filing but told The Edge Financial Daily when contacted that it has been investing in expanding its capacity and global presence, which resulted in the decline in its bottom line. “However, we expect to see growth for the full year FY14,” the official said. Its selling and distribution costs went up 33.09%, while its administrative expenses rose by 66.54%. These crossed out the 10.45% growth in its gross profit to RM209.74 million in 2QFY14 from RM189.89 million. Its six months cumulative net profit (1HFY14) is RM163.16 million, down 26.38% from the previous corresponding period’s RM221.64 million. The group said certain Class B vessels had been identified and classified as held for the sale in 2QFY14, while its oilfield services segment continues to contribute positively to earnings this quarter, the group said. On outlook, it said while offshore O&G services industry remains positive, there are signs of a slowdown in exploration and production oil companies’ capital expenditures and a softening in oil prices due to pressures from shale oil and gas. “International oil companies are more affected than national oil companies and independents, with industry wide, y-o-y expenditures growth expected to slow down to 6% and oil prices to trade range-bound between US$95 (RM301) to US$110 per barrel in the short term,” it said. Nonetheless, the group remains confident of its business units’ underlying fundamentals over the long term. This article first appeared in The Edge Financial Daily, on August 21, 2014. |
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