Malaysia-based international offshore energy facilities and services provider Bumi Armada, with its established strength in the floating production and operations (FPO) segment, has come roaring back through the end of 2017, as its projects reached completion and started producing strong revenue flows.
Stronger contributions from four new FPO projects delivered during the course of the year sent 2017 FPO business revenues soaring more than three times to MYR1.4bn ($358m), the group said in a press release.
In stark contrast, the offshore marine services (OMS) business saw an anaemic 5.0% increase in full-year revenues to barely even MYR1bn. Similar to other players in this market, the OSV segment remained challenged with high supply and low demand for vessels, which resulted in the familiar problem of pressure on charter rates, Bumi Armada lamented. The subsea construction (SC) segment meanwhile saw stronger contributions from additional work scope from the LukOil contract in the Caspian Sea.
Nevertheless these performances helped Bumi Armada to an almost doubling of 2017 revenue to MYR2.4bn and bring it back to the black with a MYR352m gain from a MYR2bn loss previously as it reeled from a series of impairment charges.
“As I have highlighted previously, 2017 was a transition year for the group, as we delivered four new FPO projects, and this is reflected by these results,” said ed and ceo Leon Harland.
Looking ahead however he warned that “the OSV business will remain challenged, as we do not expect any major changes to the demand/supply situation in 2018”.
Meanwhile, Harland also pointed out that Bumi Armada’s SC unit has planned activity in Turkmenistan and Russia over the year, and the group is actively discussing further work scope for subsequent years.
“For 2018, we expect the company to move into a more stable phase, with all the current FPO and OMS activities to remain fairly consistent. We remain focused on building a robust business model and we want to complete our internal rationalisation activities and improve our balance sheet structure,” Harland concluded.
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