Bumi Armada’s net profit for third quarter 44.2% weaker due to Impairment on vessels

PETALING JAYA: Bumi Armada Bhd’s net profit for the third quarter ended Sept 30, 2020 fell 44.2% to RM85.62 million from RM153.37 million a year ago mainly due to impairment on vessels recognised in third-quarter 2020 (Q3’20).

Compared with Q3’19, operating profit before impairment declined despite an increase in revenue due to higher depreciation arising from revision of vessels’ useful lives and residual values in 2020, and gain on disposal of joint ventures and property, plant and equipment (including Armada Perdana) in the third quarter of last year.

Its revenue jumped 6.9% to RM564.44 million from RM527.81 million.

The floating production & operations (FPO) business reported revenue of RM470.5 million in Q3’20. The decline from Q2’20 was due to lower vessel availability for Armada Kraken floating production storage & offloading (FPSO) arising from a planned shutdown in September. Revenue from the offshore marine services business improved in Q3’20 due to higher offshore services vessel utilisation.

For the nine months period, Bumi Armada saw a net loss of RM18.58 million compared with a net profit of RM293.79 million in the same period last year. However, revenue rose 10.9% to RM1.72 billion from RM1.56 billion.

The firm’s order book at the end of Q3’20 amounted to RM17.2 billion, with additional optional extensions of up to RM10.0 billion.

Bumi Armada CEO Gary Christenson said despite certain operational and logistical difficulties in the Covid environment, Bumi Armada maintained its HSE performance in Q3 with zero lost-time injuries. Its joint-venture company Armada D1 Pte Ltd received an award from ONGC for a new bareboat charter lease for Armada Sterling FPSO off India’s west coast.

“We will continue to take a prudent approach and focus on safety, sustainability, operational excellence, and financial discipline,” Bumi Armada sai.d