Published: Thursday August 9, 2012 MYT 8:56:00 AM
HDBSVR downgrades Bumi Armada to Fully Valued, TP RM3.35
KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) has downgraded Bumi Armasa to Fully Valued and cut the target price to RM3.35 as near-term prospects dampened by global delays in FPSO contract awards.
It said on Thursday it had trimmed FY12-14F earnings by 7%-9% and expected consensus to downgrade earnings.
Delays in floating production, storage and offloading (FPSO)contract awards globally have taken its toll on Bumi Armada as FPSO segment remains its key growth driver (about 50% earnings contribution).
“Outstanding FPSO bids include Belud (Malaysia) and C7 (India), which may be awarded by September 2012. However, we do not discount delays which have been common at all the oil majors,” said the research house.
HDBSVR said Bumi Armada was re-tendering for the Madura (Indonesia) project and should be submitting its bid by end of August.
Meanwhile, Bumi Armada's offshore support vessel (OSV) and transport & installation (T&I) businesses remain strong although oilfield services (OFS) has suffered due to slow contract flows in Malaysia.