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Bumi Armada dragged down by poor market, results in $15m Q4 loss

Offshore services provider Bumi Armada managed to maintain a profit for 2014 although at MYR218.7m ($60.8m) this was half of the MYR431.2m gained the year before, the company said.

Meanwhile reflecting the weakening conditions in the market, the company turned to a net loss of MYR52.6m in the fourth quarter from a profit of MYR88.3m in the previous corresponding quarter as it was impacted by weaker contributions from its various divisions, allowances and impairment charges.

Fourth quarter revenue rose 26% to MYR701.8m from MYR556.7m previously, while for the full year, revenue rose 16% to MYR2.39bn from MYR2.07bn.Bumi Armada was adversely impacted by allowances and impairments for available-for-sale financial assets and allowances for trade receivables, which amounted to MYR97m. The group also recognised cost relating to additional work on an on-going FPSO.

“Cash flows from operations full year increased to MYR680.0m in 2014 from MYR474.4m in 2013. The group has initiated cost reduction (which would include headcount rationalisation) and capital budgeting measures to enhance efficiency and productivity,” it said.

The company pointed out that in the last year it has secured two new floating production storage and offloading (FPSO) projects and total orderbook now amounts to MYR37.2bn comprising MYR24.5bn of firm contracts and MYR12.7bn of extension options.

Acting ceo and executive director, Chan Chee Beng warned that "with the deterioration in oil prices and increasing challenges in the market, we felt it was prudent and necessary to make allowances for some trade receivables that we assessed to be at risk going forward."

Chan also said Bumi Armada intends to enforce its contractual position and pursue collection of outstanding receivables. “We remain focused on executing and delivering our three FPSO projects which are under conversion, as well as managing our OSV and T&I businesses through what will be a challenging year in 2015,” he added.

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