PETALING JAYA: Bumi Armada Bhd returned to profitability in the fourth quarter ended Dec 31, 2017, posting a net profit of RM63.8mil compared with a net loss of RM1.37bil in the same period a year ago.
The offshore energy facilities and services provider’s bottom line was impacted by non-cash impairment charges for multipurpose construction vessels in FY2016.
Its turnaround came on the back of higher revenue, which rose to RM662.1mil from RM106.2mil in the same period last year.
The company also closed the full year (FY17) on a stronger footing with a net profit of RM352mil versus a net loss of RM2bil in the previous financial year.
Revenue for FY17 rose 82.3% year-on-year (y-o-y) to RM2.4bil.
In a filing with Bursa Malaysia, Bumi Armada said the increase in revenue was mainly due to higher revenue from the floating production and operation (FPO), which rose 263.5% y-o-y in FY 2017. The increase in the FPO revenues was mainly due to stronger contributions from the four new FPO projects delivered over the course of the year, it said.
The company’s offshore marine services (OMS) business saw a 5% increase in revenues in FY 2017 over the previous year.
It said the offshore support vessel (OSV) segment remained challenged with high supply and low demand for vessels, which put pressure on charter rates. On the other hand, the subsea construction (SC) segment saw stronger contributions in FY17 on the back of additional work scope awarded during the year in relation to the LukOil contract in the Caspian Sea.
The company’s order book at the end of 2017 was approximately RM22.3bil, with additional optional extensions of up to RM12.5bil.
Commenting on the results, chief executive officer Leon Harland said: “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.”
He said the OSV business would remain challenged, as the company did not expect any major changes to the demand/supply situation in 2018.
As for the SC unit, it has planned activity in Turkmenistan and Russia over the year, and the company is actively discussing further work scope for subsequent years.
“The group’s results were further improved by the various internal rationalisation activities that have been introduced to streamline our organisational processes, as well as by the prioritisation of activities within the business units,” Harland said.
“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,” he added.