KUALA LUMPUR: Affin Hwang Capital reiterated Bumi Armada Bhd as oe of its top sector picks with an unchanged sum-of-the-parts-based target price of RM1.
The research firm said it is condident Bumi Armada would see a strong uplift in earnings growth in 2018, mainly underpinned by FPSO Olombendo and Kraken.
It said FPSO Olombendo's final acceptance encountered a slight delay to due to an extended paperwork process in sourcing for equipment.
"Nevertheless, things are in place now with final acceptance confidently achievable before
end April 18 (from the initial March timeline)."
Olombendo contributes to the bulk of FPSO revenue, close to 60% of Affin Hwang's 2018-2020 estimates.
Meanwhile, FPSO Kraken will undergo some final stage gas system commissioning before commissioning the 72-hour final acceptance testing.
"The planned maintenance shutdown of Kraken field in 3Q18, as guided by EnQuest is not expected to affect the FPSO’s BBC, as BAB will continue to be paid."
Affin Hwang Research added that FPSO Perdana continues to see operations only covering O&M cost from offloading proceeds while discussions are ongoing for FPSO TGT1's firm expiry extension, expected to be finalised by the latter half of April 2018.
With regards to FPSO Claire, Bumi Armada is ecpecting a clearer indication by 4Q18 with regards to the legal case against Woodside.
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