Bumi Armada Q3 profit drops 35%

Bumi Armada hit with $247m impairment on OSV fleet value

Malaysia’s offshore oilfield services provider Bumi Armada saw its third quarter profit slashed as revenue declined amid the challenging offshore market.

Profit for the quarter ended 30 September 2015 was recorded at MYR70m ($16.4m), a decrease of 35.2% from MYR108.09m seen in the previous corresponding period.

Kuala Lumpur-listed Bumi Armada, however, reported a first nine months net loss of MYR149.49m as against the year-ago profit of MYR271.25m, due to the non-cash impairment charge that was taken in the second quarter this year.

Revenue for the third quarter declined by 12.1% year-on-year to MYR559.46m due to the continuing lower utilisation of the OSVs as well as lower activity in the transportation and installation (T&I) business.

“The FPSO business is the main revenue and EBITDA generator of the group and continues to deliver,” said Chan Chee Beng, acting ceo of Bumi Armada.

“The weak oil price and negative short-term outlook for the oil and gas market, however, continues to put pressure on the utilisation of our OSV and subsea vessels,” he said.

The company’s rationalisation and efficiency plans saw the merger of its OSV and T&I businesses into a new offshore marine services (OMS) unit and further reductions in headcount.

“While the market remains pressured by lower oil prices, the group’s long-term outlook is anchored by its firm orderbook of MYR29bn (with potential extension options of MYR15.6bn), with its new FPSO and FGS projects expected to come on stream in 2016,” Chan said.