COMMENTS ON BUMI ARMADA BERHAD (5210)

FIGURE 1: BUMI ARMADA BERHAD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2017 annual report.

1.       GENERAL INTRO: This counter core business is on providing services to offshore oil fields. Owner and operator of marine vessels for operation oil fields.

2.       NOTABLE POINTS:

a.       type of services/vessels:

                           i.      floating production and operation (FPO) - construction and operation of floating oil and gas facilities, currently the 5th largest FPO operator in the world

                         ii.      Offshore marine services (OMS) - the offshore service vessels (OSV) provide anchor-handling, towing, transportation, accomodation and safety support services, as well as three subsea construction vessels for pipeline installation and heavy lift operations

b.      A multinational company having operations in 17 countries including Malaysia, Singapore, Vietnam, Indonesia, India, Turkmenistan, Africa, Brazil, venezuela and Mexico.

c.       Currently facing low charter rates of the offshore service vessels, due to oversupply of vessels and weak demand. Average utilisation rate around 50%.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~2402 million in 2017 annual report, this is a high revenue company.

b.      SHARE PRICE: share price in last few years on decreasing trend, decrease from ~RM2.20 in 2014 to current share price of around ~RM0.20.

c.       EARNING PER SHARE (EPS): earning per share in last 5 years were fluctuating, EPS were 14.71, 6.98, -4.00, -32.18, 6.01sen per share, respectively, making losses in 2 out of 5 years.

d.      FUTURE POTENTIAL/PROSPECTS: depend oil prices and capex spending by oil companies on new exploration.

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 1815 million, around 9.6% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2017 report, there was no dividend payout declared.

b.      CONSISTENCY: last five years (2013-2017) dividends declared were 3.14, 3.25, 1.63, 0.82, 0 sen per share, respectively.

5.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around RM 1845 million, equivalent to RM 0.31 per share

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is well supported by institutional investors, there are 22 institutional investors at top 30 major shareholders list, including Lembaga Tabung Haji, EPF, Skim Amanah Saham Bumiputera, Kumpulan Wang Persaraan and few insurance companies and investment funds.

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