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Write up on Bumi Armada
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Kim Eng Hong Kong is a subsi diary o f Mal aya n Bank ing Berhad
6 March 2012 Page 1 of 60
Malaysia
17 October 2011
PP16832/01/2012 (029059)
Initiating Coverage 6 March 2012
PP16832/01/2013 (031128)
Page 1 of 2
Bumi Armada The Armada strikes back
Initiating coverage with a Buy and RM4.88 target price. Bumi
Armada (BA) offers a niche exposure to the Floating Production,
Storage and Offloading (FPSO) market. As one of the fastest growing
FPSO operators in the world, it has set its sights on being the Top 4
player in terms of FPSO fleet size by 2013. It is also poised to gain
traction in Malaysia‟s O&G sector, as it leverages on PETRONAS‟
capex programme. BA, which is steadfastly building up franchise
values, is a steady growth stock with a 3-year net profit CAGR of 25%.
Bigger, bolder, better. BA is today a giant compared to its previous
self. The restructured entity is now a powerhouse with a global
presence, covering 4 core operations – FPSO, Offshore Supply Vessel
(OSV), Transportation & Installation (T&I) and Offshore Field Services
(OFS). It commands an armada of 53 vessels: 5 FPSOs, 46 OSVs, 1
pipelay barge and SURF vessel operating across the the world.
In an entrenched position to ride global E&P programmes. We see
innumerable opportunities for BA to capitalize on the: (i) 125 potential
FPSO projects worldwide, (ii) requirement for new, highly technical
OSVs to support global deepwater programmes, (iii) services for the
subsea umbilicals, risers and flowlines (SURF), inspection, repair and
maintenance (IRM) markets, and (iv) increasing number of offshore
development projects in Malaysia (marginal field and Enhanced Oil
Recovery (EOR) development) and the Caspian region.
Set to embark on an aggressive asset expansion plan. We see BA
prospecting for new assets for growth. BA will likely double its FPSO
assets, triple its SURF vessels and add 4 new OSV vessels to its fleet
by 2015. This is possible as it has the balance sheet to support the
heavy capex (estimated RM6.4b) for its expansion programme while
keeping its net gearing below the 1.5x threshold.
Strong earnings visibility 3 years out. We project a 3-year net profit
CAGR of 25%. All divisions will contribute to growth, fueled by new
vessels (FPSO, OSV, pipelay barges) progressively coming onstream
and higher utilization (ex-dayrate revision) for the existing vessels.
Bumi Armada – Summary Earnings Table Source: Maybank IB
FYE Dec(RM m) FY10A FY11A FY12F FY13F FY14F Revenue 1,241.4 1,543.9 1,800.7 2,220.6 2,504.3
EBITDA 715.6 845.1 1,048.7 1,272.6 1,442.0
Recurring Net Profit 350.8 387.3 532.2 627.5 706.9
Recurring Basic EPS (Sen) 12.0 13.2 18.2 21.4 24.1
EPS growth (%) 26.4 10.4 37.4 17.9 12.6
DPS (Sen) 0.0 2.5 0.0 0.0 0.0
PER 34.5 31.2 22.7 19.3 17.1
EV/EBITDA (x) 21.3 16.4 13.9 11.8 10.4
Div Yield (%) 0.0 0.6 0.0 0.0 0.0
P/BV(x) 13.8 3.4 3.0 2.6 2.3
Net Gearing (%) 359.0 49.9 61.6 63.0 54.4
ROE (%) 40.1 10.9 13.3 13.5 13.2
ROA (%) 10.8 9.3 9.2 9.2 9.1
Consensus Net Profit (RM m) - - 585.0 706.5 794.4
Buy (new)
Share price: RM4.13 Target price: RM4.88
Wong Chew Hann, CA [email protected] (603) 2297 8688
Chong Ooi Ming [email protected] (603) 2297 8676
Stock Information
Description: Integrated Oilfield services provider with 4
core operations: FPSOs, OSVs, T&I vessels and offshore field services.
Ticker: BAB MK Shares Issued (m): 2,928.5 Market Cap (RM m): 12,094.5
3-mth Avg Daily Volume (m): 3.73 KLCI: 1,589.22 Free float (%): 29.6
Major Shareholders: % Objektif Bersatu Sdn Bhd 42.4
Ombak Damai Sdn Bhd 11.6 Wijaya Sinar Sdn Bhd 7.3
Karisma Mesra Sdn Bhd 5.4
Key Indicators
Net cash (RM m): (1,760.6) NTA/shr (RM): 1.20
Net gearing (x): 0.5
Historical Chart
3.0
3.3
3.6
3.9
4.2
4.5
Jul-11 Sep-11 Nov-11 Jan-12
BAB MK Equity
Performance:
52-week High/Low RM4.33/RM3.03
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) 4.0 11.3 na na 0.7
Relative (%) 0.8 3.8 na na (3.1)
6 March 2012 Page 2 of 60
Bumi Armada 17 October 2011
Table of contents Page
Key investment merits 3
Introduction: Bigger, bolder, better 4
Snapshot of Bumi Armada‟s operations
• Floating Production, Storage & Offloading (FPSO) 7
• Offshore Supply Vessel (OSV) 12
• Transport & Installation (T&I) 16
• Offshore Field Services (OFS) 16
• Revenue and EBIT breakdown 17
Floating, Production, Storage & Offloading (FPSO)
• Fundamentals 20
• Opportunities 26
Offshore Supply Vessel (OSV)
• Fundamentals 29
• Opportunities 38
Transport & Installation (T&I)
• Fundamentals 39
• Opportunities 40
Offshore Field Services (OFS)
• Fundamentals 42
• Opportunities 45
FInancials
• Financial projections 48
Valuation 51
Peers‟ valuations – FPSO operators 52
Peers‟ valuations – OSV operators 52
Risks 53
Financial statements 55
Appendix : Captains & Commanders of the Armada 57
Kim Eng Hong Kong is a subsi diary o f Mal aya n Bank ing Berhad
6 March 2012 Page 3 of 60 Page 1 of 2
17 October 2011
PP16832/01/2012 (029059)
Bumi Armada
Key investment merits
Introduction. The Bumi Armada of today is a transformed entity. The
Group has been restructured and now has four businesses: (i) FPSO,
(ii) OSV, (iii) T&I and (iv) OFS, with a global presence in each segment.
The company is driven by a dedicated, experienced and professional
management team, comprising talent from multiple nationalities.
Solid business model. We like the FPSO space. It provides steady
visibility (contracts and earnings) with reasonable IRRs. Competition is
limited given the high investment and technical hurdle requirements.
Bumi Armada‟s OSV operation, relatively new, modern and modulated
to the high-end vessel segment is a positive, for it provides respectable
utilisation and day rates. Bumi Armada‟s stint in the T&I and OFS
divisions has been brief so far but has delivered the desired results.
Well-positioned to push for new contracts, locally and globally.
Prospects are bright for Bumi Armada to ride on the global O&G capex
upcycle, as it capitalises on the growing demand for new FPSO and
OSV charters, as well as growing requirements for brownfield
developments. In the domestic ( i.e. Malaysia) space, the prospect of
leveraging on PETRONAS‟ deepwater, marginal field and enhanced oil
recovery (EOR) field projects is high. It has both the operational
foresight and financial structure to leverage and support its expansion
programmes.
Powering up - where growth and aspirations meet. We opine that
Bumi Armada has the balance sheet to fund 3 new SURF vessels, 5
FPSOs and 8 OSVs over the next three years without straining its
cashflow and gearing levels. This is a sensible aspiration, which would
propel Bumi Armada to become the fourth largest FPSO operator
globally with a competitive edge to boot.
A towering growth stock with rewarding returns. With a 3-year net
profit CAGR forecast of 25%, its relentless pursuit of excellence will
secure Bumi Armada the status of fastest-growing operator among its
global peers. However, given prospects for high growth, we believe that
it is unlikely that Bumi Armada will reward shareholders with meaningful
dividends in the foreseeable future.
High conviction: valuations with compelling growth prospects. We
value Bumi Armada at RM4.88, using the sum-of-part (SOP) valuation
methodology. At our target, Bumi Armada would have a market
capitalisation of RM14.3b, a valuation that would see it become the
largest FPSO player worldwide by market value (ahead of SBM‟s
RM10.3b), while outpacing its contemporaries in growth and profit
margins.
6 March 2012 Page 4 of 60
Bumi Armada 17 October 2011
Bigger, bolder, better
Bumi Armada – remembering the old days. The Bumi Armada of
yesterday was just a shadow of its present incarnation. The previous
entity, listed on 25 June 1997 and delisted six years later on 18 April
2003 (with a market capitalization of RM441m), was primarily engaged
in just two main business activities:
(i) offshore support vessel (OSV) operations, and
(ii) offshore construction, installation & maintenance services.
Operations then were predominantly domestic-centric, supported by 25
vessels, 2 tanker support vessels and a Floating Production, Storage
and Offloading (FPSO) system.
The present day – rejuvenated and ready to ride the waves. The
group has since been restructured and the Bumi Armada of today is a
much larger and more diversified entity with a global reach. True to its
name, it really has burgeoned into an armada, with a fleet of 5 FPSOs
(including two undergoing conversion), 46 OSVs, one pipe-laying barge
and another SURF vessel, making it the jointly fifth-largest FPSO
operator in the world and the third-largest OSV operator in Southeast
Asia. Meanwhile, its business has grown to encompass four segments:
(i) FPSO,
(ii) OSV,
(iii) Transport & Installation (T&I) and
(iv) Offshore Field Services (OFS)
with two support units: Fleet Management Services (FMS), and
Engineering, Procurement and Construction (EPC).
Usaha Tegas Group (UT) is the largest shareholder. UT, a privately-
owned holding company, presently holds a 42.4% stake, held through
Objektif Bersatu Sdn Bhd (OBSB).
The other four substantial shareholders that hold a cumulative 27.5%
stake are:
(i) Ombak Damai Sdn Bhd (ODSB) - 11.6%
(ii) Wijaya Sinar Sdn Bhd (WSSB) - 7.3%
(iii) Karisma Mesra Sdn Bhd (KMSB) - 5.4%
(iv) Wijaya Baiduri Sdn Bhd; (WBSB) - 3.2%
A well-managed set-up, driven by experienced management. Bumi
Armada is led by an experienced, dedicated and culturally diverse
senior management team that presides over an agile organisation. The
group has proved it can attract worldwide talent (with over 20
nationalities) to operate across multiple countries while its flat
organisational structure gives it the ability to react efficiently and quick ly
to business threats and opportunities, both domestically and
internationally. Hassan Asad Basma, the CEO of Bumi Armada, has an
extensive 30 years of experience in the O&G industry with 18 years‟
working knowledge in Asia.
6 March 2012 Page 5 of 60
Bumi Armada 17 October 2011
Business model – Pre and post restructuring
Support Units
Business Units
Legend
Floating Production
Storage and
Offloading (FPSO)
Offshore Support
Vessel (OSV)
Transport and
Installation Services (T&I)
Oilfield Services
(OFS)
Engineering,
Procurement and Construction
Fleet Management
Services
BAN Haven
• Offshore installation,
servicing and
maintenance
Restructuring
•Tripled FPSO f leet size
•Newer, younger and bigger OSVs
•Disposal of Haven
Owns and leases 5
FPSOs
• 2 in Nigeria
• 1 in Vietnam
• 2 to start operations in Balnaves field Australia
& D1 field India
Owns a fleet of 46
OSVs
• 26 AHT/ AHTS
• 8 accommodation
barges/ boats• 12 others
Pipelay, heavy lift,
subsea installation,
floater, mooring
installation and marine
spread support services• 1 DLB in the Caspian
• Acquired a SURF
vessel- Armada Hawk
Converted and sold an
FSO to Petrofac for the
Sepat field
• Services cover all
aspects of the oil field life cycle, from
exploration to
development,
production and
abandonment
Solely in house EPC
and project
management
• Executed the “Steel
on Water” new build fleet expansion
programme
• Oversaw conversion of
FPSOs and
construction and re integration of Armada
Installer (DLB)
In-house management
and operations of fleet:
• has access to over
1,300 crew members
• Offices and shore bases in Malaysia,
Singapore, India,
Brazil, the Congo,
Mexico, Nigeria and
Turkmenistan
OSVs and related logistics;
•25 OSVs,
•2 tankers
•and 1 FPSO
Sources: Company, Maybank-IB
6 March 2012 Page 6 of 60
Bumi Armada 17 October 2011
SECTION 1: EXISTING OPERATIONS
6 March 2012 Page 7 of 60
Bumi Armada 17 October 2011
A snapshot of Bumi Armada’s operations
(i) The provision of FPSO services
A growing force in the FPSO world. Bumi Armada, ranked jointly 5th
in the world by fleet size (lease units), is the first to own and operate a
FPSO in Malaysia and is touted to be the only operator worldwide to-
date to have redeployed the same FPSO (Armada Perkasa) three times
across two continents (i.e. Asia, Africa).
Building its niche in the segment for small-sized, conversion
FPSOs. Bumi Armada owns & operates three FPSOs (Armada
Perkasa, Armada Perdana and Armada TGT1) on firm, long-term
charters. It is currently outfitting another 2 units, the Armada D1 &
Armada Claire (Balnaves), to be deployed in India (4Q 2012) and
Australia (1Q 2014) respectively. Type-wise, all of its FPSOs consist of
converted units and in terms of processing capacities, fit into the
category of small-sized FPSOs (< 80,000 bpd of oil, 0.8m bbls storage).
Snapshot of global independent FPSO operators by fleet size
119
12
7
43
1
4
12 2 2
1
6
2
2
1
24
21 1
1
4
11
20
3
6
9
12
15
18
SBM Modec BW Teekay Bluewater Bumi Armada OSX Maersk Petrofac Fred Olsen Saipem Sevan Tanker Pacific Aker FP
(Units) Existing Fleet On Orderbook Idle
Sources: Company, Maybank-IB
Existing FPSO contracts
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Armada Claire
Armada D1
Armada TGT 1
Armada Perdana
Armada Perkasa
Nigeria: Afren 2008 - 2013 (2018)
Nigeria: NAE 2009 - 2019
Vietnam: Hoang Long JOC 2011 - 2018 (2026)
India: ONGC 2012 - 2019 (2025)
Australia: Apache 2014 - 2017 (2021)
Sources: Company, Maybank-IB
6 March 2012 Page 8 of 60
Bumi Armada 17 October 2011
Arguably one of the fastest growing FPSO players in the field.
Bumi Armada‟s FPSO fleet has expanded rapidly in recent years, with
acquisitions averaging one new FPSO a year between 2007 and 2011.
It refurbished the Armada Perkasa for a 3rd contract in 2007 and
secured contracts for Armada Perdana and Armada TGT1 in 2009.
In 2011 Bumi Armada won two more contracts, chartering the Armada
D1 to ONGC in India while the Armada Claire was contracted to
Apache for its Balnaves field in Australia.
Bumi Armada’s present FPSO fleet
FPSO Narrative
Armada Perkasa &
Armada Perdana
Currently on operation in Nigeria. Armada Perdana is
chartered to ENI‟s subsidiary; NAE for the Oyo field while
Armada Perkasa is leased to Afren for the Okoro Setu field
with firm 10 year contracts till 2019.
Petroleum consultants Netherland, Sewell & Assoc, Inc.
(NSAI), have recently certified gross 2P reserves in the Okoro
Setu field at 19.5m barrels (bbls) of oil (as at Dec 2010) and
626m-2,200m bbls for Oyo (Apr 2011). To-date, only 15.2m
and 3.6m bbl have been produced respectively.
Armada TGT1 Chartered to PetroVietnam for the Te Giac Trang (TGT) field in
Vietnam. Production began on 22 Aug 2011; the contract
period is till 2018 with the potential for extension up to 2026. A
2nd well is expected to be added in 2012.
Armada D1 On 10 Aug 2011, Bumi Armada signed a charter with ONGC to
lease an FPSO for the D1 field in India. The USD620m
contract is fixed for 7 years (2019) with annual extension
options for another 6 years (2025). Bumi Armada has a
49.99% stake in the FPSO with the rest held by Forbes &
Company Ltd
Armada Claire Bumi Armada has recently signed a contract with Apache
Energy Ltd in Sept 2011 to lease Armada Claire to the
Balnaves development in Australia. With 14m-19m bbls of
reserves, expectations are for 1st oil before 2014. Contract
value of USD445m (RM1.46b).
Rainbow River Rainbow River is an Aframax tanker on which Bumi Armada
has the option to convert into an FPSO.
Source: Company, IMA, Maybank-IB
Proven and prospered, even during the credit crisis. Operationally,
Bumi Armada has proven its technical excellence, track record and
execution capabilities in the FPSO business. It has been able to deliver
vessels on time, fully funded and within budget even during the global
financial crisis in 2008. The Armada Perkasa, Armada Perdana and
Armada TGT1 vessels have met all contractual uptime performance
requirements to-date.
Arguably among the most efficient FPSO operators in the world.
From a financial perspective, Bumi Armada is among the better-run
operators in the FPSO circle. Its EBIT margins of 27-32% are the
highest vis-à-vis its peers 9-26%. Comparatively, it has the advantage
of a lower cost base structure vis-à-vis its European counterparts. This
is due to its effective cost management (i.e. firm cost controls, facility to
source for funds and tankers at decent rates, close proximity to yards)
and ability to execute projects with minimal cost overruns.
6 March 2012 Page 9 of 60
Bumi Armada 17 October 2011
Vessel 1: Snapshot of FPSO Armada Perkasa
Vessel details
Terms Details
Area of operation: On contract till 2018, in Okoro Setu field Nigeria
Contract amount (USD m): 150
Duration: 5-plus-5 year fixed-time charter.
History: Deployed at Bunga Kekwa, (97-04) & Baram, (05-06)
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): 30.0 Length (m): 221.2
Storage capacity (bbl ‘000): 298.4 Breath (m): 32.2
Ave. daily production (bpd): 16.1 Draft (m): 17.5
Dwt (‘000 tonnes) 58.6
Hull age, type and conversion yard: 1975, Single hull, Keppel Singapore
Sources: Company, Afren, Maybank-IB
Vessel 2: Snapshot of FPSO Armada Perdana
Vessel details
Terms Details
Area of operation: On contract till 2019, in Oyo field Nigeria
Contract amount (USD m): 400
Duration: 10 year fixed-time charter.
History: Petromin‟s Histria Crown, sold for USD 22m
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): 40 Length (m): 308.7
Storage capacity (bbl ‘000): 1,100 Breath (m): 46.0
Ave. daily production (bpd): na Draft (m): 22.6
Dwt (‘000 tonnes) 156.5
Hull age, type and conversion yard: 1984, Single hull with side impact protection,
Keppel Singapore
Sources: Company, Maybank-IB
Vessel 3: Snapshot of FPSO Armada TGT1
Vessel details
Terms Details
Area of operation: On contract till 2026, in TGT field Vietnam
Contract amount (USD m): 700
Duration: 7-plus-8 year fixed-time charter.
History: Great Eastern‟s Jag Layak, sold for USD 44m
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): 55 Length (m): 274.0
Storage capacity (bbl ‘000): 620 Breath (m): 47.8
Ave. daily production (bpd): na Draft (m): 22.8
Dwt (‘000 tonnes) 147.0
Hull age, type and conversion yard: 1996, Double hull, Keppel Singapore
Sources: Company, Various, Maybank-IB
6 March 2012 Page 10 of 60
Bumi Armada 17 October 2011
Vessel 4: Snapshot of FPSO Armada D1 (undergoing conversion)
Vessel details
Terms Details
Area of operation: On contract till 2025, in D1 field India
Contract amount (USD m): 620
Duration: 7-plus-6 year fixed-time charter.
History: Ondimar‟s Monte Umbe, selling price USD 21m
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): 50 Length (m): 246.0
Storage capacity (bbl ‘000): 580 Breath (m): 42.0
Ave. daily production (bpd): na Draft (m): 14.0
Dwt (‘000 tonnes) 107.2
Hull age, type and conversion yard: 1997, Double hull, Keppel Singapore
Sources: Company, Maybank-IB
Vessel 5: Snapshot of FPSO Armada Claire (Griffin Venture- undergoing conversion)
Vessel details
Terms Details
Area of operation: On contract till 2021, in Balnaves field Australia
Contract amount (USD m): 445
Duration: Four-plus-four year fixed-time charter.
History: BHP‟s Griffin Venture, deployed at Griffin field (1994-2009)
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): 80 Length (m): 240.7
Storage capacity (bbl ‘000): 750 Breath (m): 41.8
Ave. daily production (bpd): na Draft (m): 22.9
Dwt (‘000 tonnes) 102.1
Hull age, type and conversion yard: 1993, Double hull, Keppel Singapore
Sources: Company, Maybank-IB
Vessel 6: Aframax Rainbow River: (Purchase option secured, conversion candidate for next FPSO project)
Vessel details
Terms Details
Area of operation: na
Contract amount (USD m): na
Duration: na
History: GNM‟s Rainbow River, purchase price RM68m
Performance Statistics Ship Dimensions
Production capacity (bpd ‘000): na Length (m): 246.0
Storage capacity (bbl ‘000): na Breath (m): 42.0
Ave. daily production (bpd): na Draft (m): 14.7
Dwt (‘000 tonnes) 107.2
Hull age, type and conversion yard: 1999, Double hull, awaiting yard announcement
Sources: Company, Maybank-IB
6 March 2012 Page 11 of 60
Bumi Armada 17 October 2011
Bumi Armada: Deployment of its FPSO
Gulf Of MexicoMideast/
SW Asia
Australia/ NZ
Brazil
Far East
CanadaNorthern
Europe
Africa
South East Asia
Armada Perkasa, Okoro Setu, Nigeria
(2008-2013/18)
Armada Perdana, Oyo Nigeria(2009-2019)
Armada TGT1, Te Giac Trang (TGT),
Vietnam
(2011-2018/26)
Armada Claire, Balnaves, Australia
(2014-2017/21)
Armada D1, D1 field India
(2012-2019/21)
Sources: Company, Maybank-IB
6 March 2012 Page 12 of 60
Bumi Armada 17 October 2011
(ii) The provision of OSV services
A large and modern fleet. Bumi Armada has a large and modern OSV
fleet with cross-border operational capabilities at both green and
brownfields. It owns 25 Anchor Handling Towing Support (AHTS)
vessels, 8 accommodation workboats workbarges, 3 mooring launch
vessels, 3 Straight Supply Vessels (SSVs), 3 platform supply vessels
(PSV), 2 utility vessels, a standby vessel and an oil recovery vessel.
The biggest operator in Malaysia, 3rd
in SEA. With a fleet of 46
OSVs, Bumi Armada is the largest fleet operator in Malaysia and 3rd in
Southeast Asia, by size and competitiveness. According to Infield
Services Limited, Bumi Armada is recognised as a 1st tier OSV player
(i.e. a sizeable fleet capable of servicing large operators and projects).
Its other accolades include being the first domestic operator to own and
operate dynamic positioning (DP) AHTS for deepwater projects (Kikeh).
70% waiver on Malaysia tax due to Section 54A. Bumi Armada is
one of a select few OSV operators that enjoys Section 54A status under
the Malaysia‟s Income Tax Act. This grants the group a 70% waiver on
income tax from its Malaysian-flagged vessels.
Has a young fleet; 8 years average. Most of the vessels are deployed
in Malaysia (28 units). In the overseas market, 16 of its vessels are
deployed in Africa (i.e. Nigeria: 10, Congo: 1), South & Central America
(i.e. Venezuela: 1, Mexico: 1, Brazil: 2) and Asia (i.e. Brunei: 1). The
fleet is young, with an average age profile of 8 years. 54% of its vessels
are 6 years old or less. 2 contracted newbuilds are under construction.
Decent utilization rates. Bumi Armada has successfully chartered its
vessels at decent rates and at decent utilization levels over the past
three years. In terms of vessel-type, the accommodation workboats/
barges are the most employable, with high utilization rates of 80-91% in
2008-10. Meanwhile, the AHT and AHTS segment is the most volatile,
with utilization ranging between 66% and 98%. In 4Q 2011, Bumi
Armada‟s OSV fleet enjoyed a commendable 96% utilisation rate.
AHTS: Dayrates and utilization level (2008 – 2010) Year DCR range (USD per bhp) Utilization rate (%) No. of OSVs (unit)
2010
3.85 65.7 23 1.32
2009
2.82 86.9 18 1.22
2008 1.15
3.57 95.1 14
Sources: Company, Maybank-IB
Accomodation workboat/ barge: Dayrates and utilization level (2008 – 2010)
Year DCR range (USD per bed) Utilization rate (%) No. of OSVs (unit)
2010
257.5 80.0 8 63.9
2009
257.5 91.2 8 63.9
2008 58.4
174.6 91.1 6
Sources: Company, Maybank-IB
Other OSVs: Dayrates and utilization level (2008 – 2010)
Year DCR range (USD per bhp) Utilization rate (%) No. of OSVs (unit)*
2010
5,000 73.4 9 1,076
2009
5,628 61.9 19 534
2008 569
6,902 85.2 16
Sources: Company, Maybank-IB; * excludes Armada 5, Armada 6 and Armada Tugas 1 that are under jointly-controlled entity; Armada Century Ltd
6 March 2012 Page 13 of 60
Bumi Armada 17 October 2011
OSV: Operators in South East Asia (fleet size)
0 10 20 30 40 50 60 70
Swire
PACC
Bumi Armada
Ezra
Alam Maritim
RK
Swissco
Pacific Richfield
Jaya
Scomi
Swiber
CH Offshore
Sealink
Eastern Offshore
BritOil
Petra Perdana
P. Radiance
Pelican
Vietsovpetro
Anjong
Tgoff
Trinity Offshore
Chuan Hup
Mermaid
Strato
ASL
Otto
Nor Offshore
Number of vessels
Bumi Armada
Sources: Company, Infield, Maybank-IB
OSV: Competiveness landscape
Great Offshore
RK
Ezra
PACC
Swire
Swissco
Pacific Radiance
Trinity Offshore
Swiber
Sealink
CH Offshore
ASLOtto Marine
Scomi
Brit Oil
Mermaid
Nor Offshore
Tanjung Offshore
Eastern OffshorePetra Perdana
Pacific Richfield
Greatship
Pelican
AjangChuan Hup
Vietsovpetro
Strato NC
70
60
50
40
30
20
10
0
Siz
e (C
urr
en
t+ N
ew
build
fleet)
ODS market presence score
Jaya
Source: Infield
6 March 2012 Page 14 of 60
Bumi Armada 17 October 2011
Bumi Armada: Overview of OSV fleet
No. Vessel Type Built Age bhp beds DP Status charter Location Charterer
1 Armada Tuah 6 AHT 1997 15 4,000 - - Short Labuan
2 Armada Tuah 8 AHT 2002 10 4,840 - - Long Kemaman PTSC, Vietnam
3 Armada Tuah 9 AHT 2002 10 5,040 - - Long Kemaman EMEPMI
4 Armada Tuah 10 AHT 2003 9 4,000 - - Long Kemaman PTSC, Vietnam
5 Armada Tugas 4 AHT 2005 7 5,040 - - Long Nigeria Afren
6 Armada Tuah 20 AHTS 2004 8 5,040 - - Short Kemaman
7 Armada Tuah 21 AHTS 2005 7 5,040 - - Long Labuan Shell
8 Armada Tuah 22 AHTS 2005 7 5,040 - - Long Nigeria Afren
9 Armada Tuah 23 AHTS 2006 6 5,040 - - Long Kemaman EMEPMI
10 Armada Tuah 24 AHTS 2006 6 5,040 - - Unemployed Kemaman
11 Ventures Tuah Satu** AHTS 2007 5 6,000 - DP1 Long Kemaman
12 Ventures Tuah Dua** AHTS 2007 5 5,000 - DP1 Long Kemaman
13 Armada Tuah 25 AHTS 2007 5 5,040 - DP1 Long Kemaman Petrofac
14 Armada Tuah 26 AHTS 2007 5 5,040 - DP1 Long Labuan Murphy Oil
15 Armada Tuah 80 AHTS 2008 4 8,000 - DP1 Short Labuan
16 Armada Tuah 82 AHTS 2009 3 8,000 - DP1 Short Labuan Murphy Oil
17 Armada Tuah 81 AHTS 2010 2 8,000 - DP1 Long Nigeria Afren
18 Armada Tuah 83 AHTS 2010 2 8,000 - DP1 Unemployed Tj. Langsat
19 Armada Tuah 84 AHTS 2010 2 8,000 - DP1 Unemployed Tj. Langsat
20 Armada Tuah 85 AHTS 2010 2 8,000 - DP1 Short Kemaman
21 Armada Tuah 100 AHTS 2006 6 9,000 - DP2 Long Labuan Murphy Oil
22 Armada Tuah 101 AHTS 2007 5 9,000 - DP2 Short Nigeria
23 Armada Tuah 102 AHTS 2008 4 12,000 - DP2 Long Brazil Petrobras
24 Armada Tuah 104^ AHTS 2009 3 12,000 - DP2 Short Nigeria
25 Armada Tuah 105 AHTS 2009 3 12,000 - DP2 Short Venezuela Petromin/ PDVSA
26 Armada Goodman Accom. workboat 1991 21 n.a 95 - Short Labuan DESB
27 Armada Topman Accom. workboat 1991 21 n.a 95 - Short Labuan
28 Armada Iman Accom. workboat 1998 14 n.a 140 - Long Labuan Inoilco
29 Armada Salman Accom. workboat 2002 10 n.a 132 - Long Labuan Nautika
30 Armada Firman Accom. workboat 2004 8 n.a 200 - Long Kemaman Talisman
31 Armada Firman 2 Accom. workboat 2008 4 n.a 200 DP2 Short Nigeria Superior Energy, USA
32 Armada Firman 3 Accom. workboat 2008 4 n.a 200 DP2 Long Mexico Trese, Mexico
33 Mahakam Accom. workbarge 2004 8 n.a 300 - Long Congo Diamond
34 Armada Mutiara 2 Mooring launch 2008 4 750 - - Long Labuan Shell
35 Armada Mutiara 3 Mooring launch 2009 3 750 - - Long Miri Shell
36 Armada Mutiara 4 Mooring launch 2009 3 800 - - Long Miri Shell
37 Armada Aman Standby vessel 1996 16 3,600 - - Long Kemaman PETRONAS Maritime
38 Armada 5*** SSV 1984 28 2,600 - - Unemployed Nigeria
39 Armada 6*** SSV 1984 28 2,600 - - Long Nigeria
40 Armada Tugas 1*** Utility vessel 2003 9 2,500 - - Unemployed Nigeria
41 Armada Tugas 3 Utility vessel 2005 7 3,200 - - Short Kemaman
42 Armada Tugas 2 Oil recovery vessel 2003 9 3,000 - - Long Brunei Nautika
43 Armada Hydro*** SSV 1988 24 1,060 - - Unemployed Nigeria
44 PSV 1 PSV 2012 1 n.a - - Long Brazil Petrobras
45 PSV 2# PSV 2012 1 n.a - - nm nm nm
46 MPSV 1# MPSV 2012 1 n.a - - nm nm nm
Note: ** Owned by Bumi Armada’s JV, Offshore Marine Ventures Sdn. Bhd,
*** Owned by Bumi Armada’s JV,Armada Century Ltd.
# Under construction
Sources: Company, Maybank-IB
6 March 2012 Page 15 of 60
Bumi Armada 17 October 2011
Bumi Armada: Deployment of OSVs
Gulf Of Mexico
Brazil
Africa
South East Asia
Legend
Number of OSVs in the region
Venezuela
1
1
2
10
Mahakam,
Congo
1 29
Sources: Company, Maybank-IB * 1 PSV and 1 MPSV under construction
Bumi Armada: AHTS’ capacity (by bhp) Bumi Armada: Accommodation vessel capacity (by bed)
14 vessels
18 vessels
23 vessels
2008 2009 2010
76,200
120,200
160,200
Average
bhp /
AHTS 5,443 bhp 6,678 bhp 6,965 bhp
6 vessels
8 vessels
8 vessels
2008 2009 2010
962
1,362 1,362
Sources: Company, Maybank-IB Note: Excludes JVs (2 vessels) Sources: Company, Maybank-IB
6 March 2012 Page 16 of 60
Bumi Armada 17 October 2011
(iii) Transportation & Installation (T&I) services
Bumi Armada ventured into this segment in 2009. This division
primarily provides pipelay, heavy lift, subsea installation, floater and
mooring installation and marine spread support services.
Asset-wise, Bumi Armada owns and operates a derrick lay barge
(DLB), namely Armada Installer, which is currently leased to Petronas
Carigali Sdn Bhd (PCSB) in the Caspian Sea, off Turkmenistan on an
8-year contract since 2010. Armada Installer is one of only two DLB
currently operating in the Caspian region.
Track record with proven capabilities. Armada Installer, built in 2009,
is capable of laying 4”-48” diameter pipes with 800 tonnes of lifting
capability. The vessel, which can operate in water depths of between 8-
300m was commissioned and has been in operation since 2Q 2010. It
has concluded her maiden work, completing the laying of:
(i) 2 lengths of 12” diameter pipe of 7 km each,
(ii) 72 km of 12” diameter pipe and 4” diameter piggy back pipe, and
(iii) 72 km of 26” diameter pipe.
New asset acquisition. Bumi Armada has also acquired the Armada
Hawk, a 2nd
generation dynamic positioning (DP2) subsea installation
vessel, which allows it to offer subsea umbilicals, risers and flowline
(SURF) capabilities and services. Armada Hawk recently completed the
Sepat field installation work and will be deployed to the D1 field in 2012-
13.
Expanding coverage. In addition to SURF installation, the vessel will
also allow Bumi Armada to bid for inspection, repair and maintenance
(IRM) projects. We expect Bumi Armada to acquire a pipelay vessel to
expand its services in Brazil, West Africa and India.
(iv) Offshore Field Services (OFS)
This is Bumi Armada’s most recent venture, and is a key part of its
strategic focus for the Malaysia market. It leverages on PETRONAS‟
domestic programmes to: (i) develop marginal fields through innovative
solutions, and (ii) rejuvenate existing fields through Enhanced Oil
Recovery (EOR) to optimize production and arrest the declining state of
the existing fields.
Recurring opportunities. OFS entails the provision of various
specialized services required in the offshore mature/brownfield, EOR
and the risk-based services contracts (RSC) markets. Bumi Armada
currently offers services, either directly or through partnerships or
alliances in the exploration (survey), development (facilities and
installation), production (FPSO) and abandonment (T&I) phases of the
marginal oil field, and brownfield projects.
First project – Sepat field. Bumi Armada‟s initiation in this segment
came from the conversion and sale of an FSO to Petrofac for the Sepat
field, off Terengganu in 2011. The project management work was
completed on schedule in Oct 2011 in a record 8 months. Bumi Armada
recognized about RM21m in EBIT from this project alone, based on a
10% margin.
6 March 2012 Page 17 of 60
Bumi Armada 17 October 2011
Snapshot of revenue and EBIT breakdown
FPSO division is the largest contributor to group earnings, having
overtaken the OSV division in 2010. It has generated 39-45% of group
revenue and 32-38% of group EBIT over the past 3 years.
The influence of OSV operations has been on a steady decline.
Contribution to group revenue and EBIT fell from 55% and 52% in 2009
to 31% and 26% respectively in 2011.
The reduction in contribution from the OSV division to group earnings
has been more pronounced with the emergence of the more lucrative
T&I division, which made its maiden contribution in 2010. T&I reported
RM268m in revenue and RM149m in EBIT for the year, accounting for
22% and 36% of Group revenue and EBIT.
For 2011, Bumi Armada has taken on an even more diversified
earnings profile with maiden contribution from the new OFS segment
which undertook the conversion of the FSO Sepat. OFS contributed
RM211m in revenue and RM21m in EBIT accounting for 14% of total
revenue and 5% of EBIT respectively.
Bumi Armada: Revenue breakdown (by division)
FPSO45%
OSV55%
FY 2009 Revenue: RM732.1m
FPSO44%
OSV34%
T&I22%
FY 2010 Revenue: RM1,241.4m
FPSO39%
OSV31%
T&I16%
OFS14%
FY 2011 Revenue: RM1,543.9m
Sources: Company, Maybank-IB
Bumi Armada: EBIT breakdown (by division)
FPSO48%OSV
52%
FY 200 EBIT: RM294.4m
FPSO43%
OSV21%
T&I36%
FY 2010 EBIT: RM467.1m
FPSO43%
OSV26%
T&I26%
OFS5%
FY 2011 EBIT: RM518.3m
Sources: Company, Maybank-IB
6 March 2012 Page 18 of 60
Bumi Armada 17 October 2011
Steady EBIT margins trend. On a blended basis, Bumi Armada‟s EBIT
margin has been consistent, averaging around 34-40% over the past 3
years. Its 2011 EBIT was negatively impacted by a confluence of one-
off items: (i) the Armada Installer was dry docked in 3Q for upgrading,
(ii) an estimated RM22m in listing expenses, (iii) RM6m in fair value
changes of call options and (iv) higher depreciation (RM78m) due to
additional vessels (i.e. FPSO and OSV).
Operationally, the FPSO division had consistently delivered reasonable
EBIT margins of 28-33% in 2009-11. The EBIT margin for OSV typically
mirrors that of its FPSO operations, albeit with a lower 21-25% range.
The T&I division commands the highest EBIT margin among the three
core operations. Despite Armada Installer being dry docked, the
segment still generated 48% EBIT margins in 2011.
Bumi Armada: EBIT by division Bumi Armada: EBIT margin by division
53.6 92.8179.2 200.289.4
99.6
88.9116.8
148.5117.2
21.0
0
10
20
30
40
50
0
100
200
300
400
500
2008 2009 2010 2011
FPSO (LHS) OSVs (LHS)T&I (LHS) OFS (LHS)Blended EBIT margin (RHS)
( %)
27.1% 28.3% 32.4% 32.9%
27.7% 24.6% 21.2% 24.2%
55.3% 48.4%
10.0%
2008 2009 2010 2011
FPSO OSVs T&I OFS
Sources: Company, Maybank-IB Sources: Company, Maybank-IB
Earnings breakdown by geography. Bumi Armada operates across 4
continents, from the rich offshore oil fields in the Gulf of Mexico, Brazil
and Venezuela, to West Africa (Angola, Nigeria and the Congo), the
land locked Caspian Sea, Vietnam and resource rich Australia.
Asia and Africa anchor earnings. Geographically, Asia (ex-Malaysia)
and Africa were the 2 major contributors to group revenue in 2010 at
43% and 35% respectively. Malaysian operations came in third with a
15% share, followed by Latin America (7%). No geographical
breakdown was provided in 2011.
Bumi Armada: Revenue breakdown – by region
M'sia41%
Asia17%
Africa42%
FY 2008 Revenue:RM519.8m
M'sia30%
Asia17%
Africa47%
FY 2009 Revenue:RM732.1m
Americas6%
M'sia15%
Asia43%
Americas
7%
Africa35%
FY 2010 Revenue:RM1,241.1m
Americas7%
Sources: Company, Maybank-IB
6 March 2012 Page 19 of 60
Bumi Armada 17 October 2011
SECTION 2: OPPORTUNITIES
6 March 2012 Page 20 of 60
Bumi Armada 17 October 2011
FPSO: Fundamentals and prospects
1. Industry’s fundamentals
The fundamentals for the FPSO sector are favourable. Activities are
returning to more normalised levels after a dismal 2009, underlying the
positive macro (i.e. oil price rebound, higher E&P spending) and micro
drivers (i.e. increased drilling activities).
Fleet utilization has been robust. The number of idle FPSOs has
fallen considerably and field developments have been pacing up.
Africa, Asia and the Americas are the epicenter of FPSO activity.
These three regions play host to 62% of the world wide FPSO fleet, and
we believe they will remain the frontiers for FPSO operators.
Key drivers. Growth in these regions will be driven by a combination of
geological bounty, security concerns and domestic consumption factors
which will render the development of offshore fields the inevitable trend.
FPSO: Fleet utilization rate and idle units
80
85
90
95
100
0
2
4
6
8
10
12
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Idle units (LHS) Utilisation rates (RHS)(Units)
Ave. Utilisation - 94%
(%)
Source: ODS-Petrodata
FPSO contracts awarded since 2009
Company Field Oil major Country Type Award date
SBM Aseng Total Guinea Leased 2009
Petrobras Papa-Terra Petrobras Brazil Owned 2009 Bumi Armada TGT Hoang Long Joint Operating Co (HLJOC) Vietnam Leased 2009 EOC Chim Sao Premier Oil Vietnam Leased 2009 Saipem Aquila ENI Italy Leased 2009 Bluewater Nan Hai CNOOC China Leased 2009 SBM Baleia Azul Petrobras Brazil Leased 2009 Bluewater Kitan ENI Timor Leste Leased 2010
Modec Guara Petrobras Brazil Leased 2010 BW Offshore Athena Ithaca UK Leased 2010 SBM Tupi NE Petrobras Brazil Leased 2010 Hyundai Goliat ENI Norway Owned 2010 Sevan Huntington E. ON UK Leased 2010 BLT Pagerungan Kangean Indonesia Leased 2010 Petrofac Cendor Phase 2 Petrofac Malaysia Owned 2010 Daewoo CLOV Total Angola Owned 2010
Petrobras Tupi x8 Petrobras Brazil Owned 2010
OSX-2 Waimea OGX Brazil Leased 2011
Petrofac Berantai Petro/Petronas Malaysia Owned 2011
BP Quad 204 BP UK Owned 2011
SBM Offshore Block 15/06 ENI/ Sonangol Angola Leased 2011
Teekay Knarr BG Norway Leased 2011
Bumi Armada Balnaves Apache Australia Leased 2011
Bumi Armada D1 ONGC India Leased 2011
Source: Pareto Research
6 March 2012 Page 21 of 60
Bumi Armada 17 October 2011
The current global supply and demand outlook is promising, and
offers new opportunities for growth in the industry. The chart below
summarises the current supply and demand picture. The supply side
consists of all producing and ordered units while the demand side is
calculated on the basis of outstanding projects, i.e. firm tenders,
planned and possible.
FPSO: Supply and demand – based on existing projects only
20161998 2000 2004 20122006 20142008 20102002
250
200
150
100
50
199619941990 1992
(Units)
250
200
150
100
50
Producing FPSOs Idle units re employed High demand Base Low demand
Source: ODS-Petrodata
Choice between leased and owned FPSOs among oil companies
19
1
19
0
3
1
3
3
1
1
6
2
1
0
4
1
1
1
1
4
3
2
2
2
2
1
24
14
13
9
7
6
5
4
3
3
2
2
2
2
1
1
1
1
1
Petrobras
CNOOC
Other
Total
ExxonMobil
BP
Chevron
Shell
Woodside
PetroVietnam
ENI
Statoil
Hess
Maersk O&G
Petronas
BHP
ConocoPhillips
Premier
PTTEP
CNR
Talisman
Addax
Kangean
Murphy
Santos
Afren
Leased FPSOs Owned FPSOs
Sources: International Maritime Associates Inc, Maybank-IB
6 March 2012 Page 22 of 60
Bumi Armada 17 October 2011
2. Snapshot of FPSOs currently deployed
There are 160 FPSOs in the world now. Of the total inventory, 149
units are currently in service or available worldwide while 11 units are
currently off field, and available for reuse.
Utilization rate is high, at 93%. The Asia Pacific region (Asia and
Oceania) has the largest count, with 47 FPSOs in operation. This is
followed by America: North, Central & Latin (39), Africa (37), Europe
(22) and the Mediterranean & Middle East (4).
12 new FPSOs ordered since a year ago, March 2011. According to
International Maritime Associates, Inc (IMA), 12 units of new FPSOs
have been ordered since March 2011 and these vessels are scheduled
to hit the market from 2013-2015.
Current deployment of global FPSO fleet: 149 units in the field
Legend
Number of FPSOs deployed in the region
Gulf Of Mexico
Mideast/
SW Asia
Australia/
NZ
Brazil
Far EastMediterranean5
2
1
14
20
3
32 37
13
Canada
Northern
Europe
22
Africa
South East Asia
Sources: International Maritime Associates Inc, Maybank-IB
6 March 2012 Page 23 of 60
Bumi Armada 17 October 2011
3. Outlook
Current order backlog for FPSOs worldwide stands at 40 units,
comprising 16 newbuilds and 24 conversions. Of the 40 units, 3 units
are on speculative orders without field contracts. Brazil currently
dominates orders for 21 FPSOs, which include 8 serial pre-salt units.
The underlying growth in Brazil is largely due to:
i) Petrobras‟ plans to develop a new pre-salt province entailing at
least 40 large scale FPSOs and
ii) compliance with local content clauses for FPSOs (up to 65%)
FPSOs in the pipeline – 40 units on order
Legend
Australia/
NZ
Brazil
Mediterranean
2
1
214
2
Northern
Europe
5
Africa
South East Asia
Number of FPSOs to be deployed per region
3 Speculative units without contracts in hand
Gulf Of Mexico
1
Mideast/
SW Asia
1
Sources: International Maritime Associates Inc, Maybank-IB
6 March 2012 Page 24 of 60
Bumi Armada 17 October 2011
The medium-term outlook. Projection-wise, 200-250 new orders for
FPSOs are expected to enter the market over the next 5 years. The
orders are categorized into 2 core groups for: (i) visible and (ii) future
emerging projects.
(i) Visible projects: In the planning pipeline are 125 firm projects
that potentially require FPSOs should the projects go to
development. FPSO is the only likely production solution for 100 of
these projects. The remaining 25 projects could require either
FPSOs or other types of production solutions (i.e. tension-legged
platform (TLP), semi-submersibles, SPAR). With a few exceptions,
all the projects are declared discoveries, some of which will require
multiple FPSOs for development.
(i) Future emerging projects: A reasonable estimate is that 75 to
125 FPSO projects will emerge over the next 5 years that are not
now visible. This estimate is based on an assessment of the
number of projects in the current planning list and was not visible a
few years ago.
4. Sensitivities of projects
Insensitive
Based on the analysis of the 125 potential FPSO projects, it is
estimated that about 30% are relatively insensitive to short-term
market conditions.
The decision to proceed will be based on long-term oil price
assumptions and potential of the project to build reserves.
The need to replace reserves and the opportunity to exploit large
hydrocarbon complexes provide continuous momentum for project
development.
This grouping comprises big projects involving large reservoirs
offshore Brazil and West Africa.
Sensitive
40% of the 125 projects are considered opportunistic projects,
which require a robust oil price environment to proceed.
They generally involve projects with relatively small reserves and
non-major oil operators.
These groupings are projects located in South East Asia.
Somewhat sensitive: 50/50
30% of the visible 125 FPSO projects are considered somewhat
sensitive to short term market conditions, where to some degree,
underlying short to mid-term crude oil prices are taken into account
in making an investment decision.
These projects are spread over a wide spectrum of geographical
areas and generally involve fields with mid-size recoverable
reserves, heavy oil or difficult access.
6 March 2012 Page 25 of 60
Bumi Armada 17 October 2011
Most likely scenario: 100-140 units by 2015. In our view, we see
orders for 100 to 140 FPSOs over the next 5 years, averaging 20-28
new units p.a. from 2012-2015. This includes new units and
redeployments, which will generate capital expenditure (capex) of
USD65b-85b over this period. The bulk of the variation between the 3
scenarios is in the small- to mid-size FPSO orders.
An 80:20 ratio for newbuild and conversion vs. redeployments. We
opine that 80% will be satisfied via newly built or converted units while
the remaining 20% of the FPSO projects will be on redeployment basis.
All redeployment will be of small- to mid-sized FPSOs.
Forecasted FPSO new orders over the next 5 years – 3 scenarios
Low case
Oil price: USD70-90/ bbl
Reasonable case
Oil price: USD90-110/ bbl
High case
Oil price: > USD110/ bbl Types of FPSO Capex
(USD’b)
Unit Capex
(USD’b)
Unit Capex
(USD’b)
Unit Capex
(USD’b) Large FPSOs
New converted units with 150-250,000 bpd 1.20 26 31.2 28 33.6 30 36.0
Topsides pre-salt hulls 0.80 8 6.4 8 6.4 8 6.4
Midsize FPSOs
New converted units with 80-150,000 bpd 0.60 24 14.4 29 17.4 34 20.4
Topside spec hulls 0.25 3 0.8 3 0.8 3 0.8
Modified redeployed FPSOs 0.30 3 0.9 4 1.2 5 1.5
Small FPSOs
New converted units below 80,000 bpd 0.40 25 10.0 34 13.6 42 16.8
Modified redeployed FPSOs 0.15 11 1.7 14 2.1 18 2.7
Total 100 65.4 120 75.1 140 84.6
Sources: International Maritime Associates, Inc, Maybank-IB
28-80% growth on the horizon. The next 5 years‟ forecast (2011-15)
of 100-140 units new FPSO order is a 28-80% increase when
compared against actual orders over the past 5 years (2006-10). The
strong growth rate may partly be attributed to the: (i) depressed global
financial and commodity markets in 2008-09 and (ii) FPSO market at
the pre-inflection stage, with growth accelerating YoY. Our expectation
is that FPSO orders will grow at an increasing rate as the need for new
oil supply sources grows and major deepwater finds continue.
Forecasts of FPSO orders over the next 5 years – by size
34 36 38
3036
42
36
48
60
78
100
120
140
0
40
80
120
160
Past five years Low scenario: USD 70-90 oil
Base scenario: USD 90-110 oil
High: scenario: USD 110-150 oil
(Units) Large FPSOs Midsize FPSOs Small FPSOs Series4
Sources: International Maritime Associates, Inc, Maybank-IB
6 March 2012 Page 26 of 60
Bumi Armada 17 October 2011
5. Opportunities for Bumi Armada
A promising roadmap – aiming for Top 4. Bumi Armada targets to be
the fourth-largest FPSO operator by end-2013. In order to achieve this
feat, it needs to have a minimum of 8-9 FPSOs in its armada, which
implies the addition of 3-4 units to its existing fleet over the next 24
months.
A major force by 2013. This is a reasonable target, in our view
considering the myriad prospects in the FPSO market. Growing its
FPSO fleet by 3-4 units would only:
- meet 2-4% of the needs of 100-140 new projects expected to come
onstream over the next 5 years,
- account for 5-11% of the global forecasted small-sized FPSO
orders by 2015 (based on 36 to 60 projects),
- account for 27-36% of global FPSO orders, on a base case
scenario (low scenario, 30% sensitivity on small FPSOs; 11 units).
Target, focus and criteria. Based on the set criteria, we opine that
Bumi Armada will most likely focus on:
(i) small-sized FPSO projects,
(ii) converted FPSOs,
(iii) Asia Pacific (i.e. Asia and Oceania) and Africa markets, and
(iv) Oil companies that typically lease FPSOs.
25 potential projects identified. Based on our screening criteria listed
above, we have identified 25 potential projects, located in 12 countries:
Angola (1), Australia (1), Cameroon (1), Gabon (1), India (3), Indonesia
(4), Malaysia (5), Nigeria (2), Thailand (1), The Philippines (1), Tunisia
(1) and Vietnam (4). In terms of time-line:
25 potential projects oncoming projects that fit Bumi Armada
Year Country Field
2012 (8 projects) India Cluster 7 oil field (C 7)
Indonesia Madura BD, Bukit Tua (2 units)
Malaysia Gumusut-Kakap (temporary)
Malaysia PM301/PM325 (Kamelia)
Malaysia PM302 (Bunga Dahlia and Teratai)
Malaysia SB 302 (Belud)
Vietnam Dong Do/ Thang Long
2013 (5 projects) Angola Block 15/06
Indonesia Badik
Thailand B6/27
Vietnam Blk 102/106, Lac Da Vang (2units)
2014 (12 projects) Australia Lady Nora
Cameroon Etinde IE/IF
India Dhirubhai, KG-DWN-98/2 (2 units)
Indonesia Ande Ande Lumut
Gabon Dussafu Ruches
Nigeria Aje, Bilabri/Orobiri (2 units)
Vietnam Dai Nga
Malaysia N3/Spaoh
The Philippines West Linapucau
Tunisia Cosmos
Source: IMA
6 March 2012 Page 27 of 60
Bumi Armada 17 October 2011
Snapshot of projects that pass Maybank-IB’s selection screening criteria
Status Country Field Operator Water depth
(m)
First oil
possible
Bidding/ final design India C7 ONGC 85-90 2013
Bidding/ final design Indonesia Madura BD Husky/CNOOC 55 2014 Bidding/ final design Indonesia Bukit Tua Petronas 100 2014 Planned or being studied Malaysia Kamelia Petronas/ Hess <200 2014
Planned or being studied Malaysia Bunga Dahlia and Teratai Petronas 65-70 2014
Bidding/ final design Malaysia Belud Hess 155 2014
Bidding/ final design Vietnam Dong Do/ Thang Long PetroVietnam/Petronas 65 2013
Planned or being studied Indonesia Badik Anadarko 70 2013 Planned or being studied Thailand B6/27 PTTEP/Nippon Oil 35 2013 Planned or being studied Vietnam Blk 102/106 Petronas 25-30 2013
Planned or being studied Vietnam Lac Da Vang PetroVietnam 48 2013
Planned or being studied Australia Lady Nora Woodside 80 2014
Planned or being studied India Dhirubhai Reliance 1194 2014
Planned or being studied India KG-DWN-98 ONGC 225 2014
Planned or being studied Indonesia Ande Ande Lumut Genting O&G 100 2014 Planned or being studied Gabon Dussafu Ruches Harvest Natural Resources 115 2014
Planned or being studied Nigeria Aje Chevron/ Yinka 90 2014 Planned or being studied Nigeria Bilabri/ Orobiri Peak 40-300 2014 Planned or being studied Vietnam Dai Nga Idemitsu 120 2014
Planned or being studied Malaysia N3/ Spaoh Petronas 80 2014
Planned or being studied Tunisia Cosmos Chinook Energy 120 2013
Sources: International Maritime Associates, Inc, Maybank-IB
The FPSO tenders that we gauge Bumi Armada has entered into to
date are in India, Indonesia, Vietnam, Malaysia, Angola and Nigeria.
FPSO tenders that Bumi Armada could have a high prospect of winning
Country Operator Description
India Oil & Natural Gas
Corporation (ONGC)
• We do not rule out Bumi Armada expanding further into the Indian FPSO market. ONGC‟s
Cluster7 FPSO tender is a likely project, which is at the „bidding/ final design stage‟ stage.
• ONGC requires an FPSO that can handle 30,000 bpd of oil and 63mmscfd of gas with storage
capacity of 0.5m bbl and operate up to 100m water depth.
• It is no secret that 8-10 prospective contractors took part in a pre-bid meeting by ONGC. The
notable names apart from Bumi are: (i) Malaysia-based M3Nergy, (ii) Singapore-based Tanker
Pacific, (iii) India‟s ABG Shipyard, (iv) Pipavav Shipyard and (v) Mercator.
• ONGC has another project in India, KG-DWN-98/ 2, a marginal field offshore Andhra Pradesh on
India‟s East Coast, that requires an FPSO. Production is slated for 2014/16. However, the project
had several false starts in the past. This project is at the „planned or being studied‟ stage.
• We rate Bumi Armada’s chances for the Cluster 7 FPSO project as high.
Indonesia Husky/CNOOC • Bumi Armada could penetrate Indonesia‟s FPSO market this year via Husky Energy‟s tender for
an FPSO to develop its Madura BD field off East Java.
• Husky requires an FPSO that can handle 8,000 bpd of condensates and 110 mmscfd gas with
storage capacity of 370,000 barrels. The FPSO is required to handle sour gas while operators
face strict bidding requirements in terms of both local cabotage laws and financial performance
bonds. The charter period offered is a firm 10-year term with up to 5 annual extensions.
• It has been reported that Bumi Armada‟s competitors are BW Offshore, M3nergy, Tanker Pacific
and EMAS. We gauge Bumi Armada’s chances to be fair for this project.
Sources: International Maritime Associates, Inc, Maybank-IB
6 March 2012 Page 28 of 60
Bumi Armada 17 October 2011
FPSO tenders that Bumi Armada could have potentially participated in to-date (continued)
Country Operator Description
Vietnam PetroVietnam/
PETRONAS
• We expect the Lam Son Joint Operating Company FPSO contract to be awarded in 2012. The
FPSO will develop 2 oilfields in the Cuu Long basin field.
• This project is in the „bidding/ final design‟ stage. The field, co-owned by PetroVietnam and
PETRONAS, requires a FPSO with up to 18,000 bpd of oil processing capacity and storage
space for 350,000 barrels. The FPSO will initially process oil from the Thang Long fields, followed
by the Dong Do field.
• This is a 7-year fixed-term contract with the option to extend for 3 years. We understand that
Fred Olsen Production is the favoured bidder. It has received a Letter of Intent due to its
competitively-priced bid. However the contract has not yet been finalised.
• There are 3 other projects in Vietnam; (i) Dai Nga, (ii) Blk 102/106 and (iii) Lac Da Vang, which
require FPSO, MOPU/ FSO or fixed platform as production solutions. These projects are
scheduled to hit first oil in 2013-2015. These projects are at the „planned or being studied‟ stage.
Angola ENI • There are 5 projects in Angola, which are at the bidding or final design stage. They are:
(i) Block 14 – Negage, Lucapa,
(ii) Block 18 – Platina, Chumbo, Cesio,
(iii) Block 31 – Ceres, Heve, Urano, Titania, Terra, Miranda, Cordelia, Portia, Dione,
Leda, Oberon, Tebe,
(iv) Block 15/ 06 hubs – Ngoma/ Sangos/ Cabaca Norte/ Nzanza/ Cinguvu/ Mpungi/
Cabaca Southeast and
(v) Block 16 – Chisonga.
• These projects are at the „bidding/ final design stage‟ stage. Based on Bumi Armada‟s technical
track record limits, we opine that the Block 15/ 06 hubs appear to be the most likely target for
Bumi Armada due to the shallow water depth (470-1,420m); the other fields are in ultra-deep
waters (1,300-2,220m).
• For this particular field, the chances of a win are higher, in our opinion, as 2-3 FPSOs are likely to
be utilised. We are optimistic of Bumi Armada’s chances in clinching this contract .
• We have identified 4 other projects in Angola, which are at the planning stage and which are
currently being studied. They are the: (i) Block 32. (ii) Block 17/ 06, (iii) Block 18/ 06 and (iv)
Block 33. Still, Block 15/ 06 remains the most likely target due to the favourable environment
(easy to moor), water depth (470-1,420m) and existing relationship with ENI. The project is
expected to kick in by 2013 (earliest).
Nigeria Chevron/ Yinka, Peak • Bumi Armada‟s prospects in Nigeria are likely to be most favourable for the Aje field, owned by
Chevron/ Yinka. This field however is still at the planning stage. The water depth is favourable at
90m with the field targeted to achieve first oil by 2014. Apart from Aje, there are 10 other fields in
Nigeria, which are currently being studied.
Malaysia PETRONAS/ Hess/
Shell
• Up to 4 FPSO projects could be awarded this year in Malaysia. They are:
(i) SB 302 (Belud),
(ii) PM301/PM325 (Kamelia),
(iii) PM302 (Bunga Dahlia and Teratai) and
(iv) Gumusut-Kakap (a temporary FPSO with short-midterm charter)
• The first 3 are “fast-tracked” projects brought forward to boost Malaysian gas supply needs; first
gas/oil is targeted for 2014 while the last would be a short-term contract.
• Belud FPSO - It has been reported that the M3nergy and EMAS consortium submitted the lowest
bid in a recent tender for the Belud FPSO, offering the FPSO Lewek Arunothai whose charter
was prematurely terminated in Thailand‟s Arthit field in 4Q2011. However, considering the FPSO
Arunothai‟s chequered operating history, Hess is reported to have offered Bumi and MISC a
second chance to match the consortium‟s bid.
• Kamelia and Bunga Dahlia & Teratai FPSOs - Both the Kamelia and Bunga Dahlia/Teratai
projects will require floating solutions for field development. With both fields targeted to achieve
first gas by 2014, we expect contract awards by this year. Should M3Nergy win the Belud job, we
reckon either Bumi or MISC could win one of these.
• Spaoh FPSO. The Spaoh field aka NC3 will likely use an FPSO or fixed platform. Further
appraisal is being planned. This field will hit first oil by 2014/16.
Sources: International Maritime Associates, Inc, Maybank-IB
6 March 2012 Page 29 of 60
Bumi Armada 17 October 2011
OSV: Fundamentals and prospects
1. Industry’s fundamentals
OSV market currently going through an overbuilt period. Vessel
supply for now outstrips demand by 1.6x and the overhang situation
was at its crest in 2010, owing largely to the influx of orders for AHTS
and platform supply vessels (PSV) during the 2005-2007 period.
Fueled by the arrival of new vessels entering the market. 1,193
newbuilds comprising AHTS and PSVs entered the market in 2006-10,
exacerbated largely by the AHTS segment (707 units), which
outstripped the PSV (486 units) market by 1.45x.
The 5,000bhp AHTS market was the hardest hit. The oversupply
state in the AHTS market is more prevalent in the small vessel segment
(5,000bhp) and less on the higher specs (8,000-12,000bhp). The PSV
segment is slightly better off than the AHTS market, owing to the higher
investment requirement and lower volume.
Increasing number of vessels lying idle; utilisation rate at its
lowest in 2010. The number of idle vessels reached its zenith in 2010,
doubling its immobilized fleet YoY. The prevalent situation has brought
down utilization rates for AHTS and PSVs from a peak of 86-88% in
2006 to 70-72% in 2010. Old vessels (>15 years) experienced lower
utilization (40-55%) compared to newer builds (<10 years; >60%).
OSV: Global AHTS demand, supply & utilization OSV: Global PSV demand, supply & utilization
50
60
70
80
90
100
0
400
800
1200
1600
2005 2006 2007 2008 2009 2010Demand (LHS) Supply (LHS)
Utilisation (RHS) Malaysia Flag (RHS)
(%)(Units)
50
60
70
80
90
100
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009 2010Demand (LHS) Supply (LHS)
Utilisation (RHS) Malaysia Flag (RHS)
(Units) (%)
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
OSV: Supply overhang in the AHTS segment OSV: Supply overhang in the PSV segment
400
600
800
1,000
1,200
1,400
1,600
1,800
2001 2003 2005 2007 2009 2011 2013 2015 2017
Demand Total supplyEffective supply Effective supply ex 30 ex y.o.s
(Units)
400
500
600
700
800
900
1,000
1,100
1,200
1,300
2001 2003 2005 2007 2009 2011 2013 2015 2017Demand Total supplyEffective supply Effective supply ex 30 ex y.o.s
(Units)
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
6 March 2012 Page 30 of 60
Bumi Armada 17 October 2011
OSV: Increasing numbers of vessels idle OSV: Utilisation rates (old vs new)
0
30
60
90
120
150
1Q06 1Q07 1Q08 1Q09 1Q10 1Q11
AHTS PSV(Units)
50
60
70
80
90
100
1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11
Built in/ before 1991 Built on/ after 2005(Utilisation)
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
2. Outlook
Positive trends over the next 18-24 months. The vessel market for
the 5,000bhp AHTS segment remains weak and oversupplied but the
8,000-12,000 bhp AHTS segment is seeing moderate progress in rates
as several recent contracts have secured decent charter rates.
Newbuilds tailing off. 338 orders committed in the past few years will
enter the market in 2011-14. Overall, newbuild deliveries are tailing off
as the pace of orders has significantly slowed down.
PSVs are in demand. Newbuilding activities so far are nominal, largely
confined to the larger specification vessels (i.e. 8,000-12,000bhp
AHTS) and PSVs with higher DWT (>3,000t dwt).
OSV: Snapshot of newbuild for AHTS OSV: Snapshot of newbuild for PSV
-
5
10
15
20
25
0
50
100
150
200
250
2001 2003 2005 2007 2009 2011 2013
Under 9,999 10,000-14,999 15,000-17,99918,000+ bhp' 000/unit
(Units) (bhp)
0
1
2
3
4
5
6
0
20
40
60
80
100
120
2001 2003 2005 2007 2009 2011 2013
<3,000 3,000-3,9994,000+ dwt' 000/unit
(Units) (bhp)
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
6 March 2012 Page 31 of 60
Bumi Armada 17 October 2011
OSV: Global OSV newbuild by order to-date OSV: Newbuilds (2006 – 2014)
0
50
100
150
200
250
300
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
AHTS PSV
M'sia AHTS M'sia PSV
(Units)
166 164
224
327312
291
104
36 4
0
50
100
150
200
250
300
350
2006 2007 2008 2009 2010 2011 2012 2013 2014
AHTS (Delivered) PSV (Delivered)
PSV (On coming) AHTS (On coming)
Newbuild vessels
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
Dayrates have stabilized. Dayrates after going through the floor have
stabilized, as the market gradually absorbs the overbuilt situation. The
low orderbook/fleet ratio of less than 20% supports our view that the
current momentum will continue into 2012. We expect day rates to
trade sideways and only improve over the next 18 months.
A cyclical recovery in motion. We expect a cyclical recovery in
demand for offshore vessels. The strength in oil prices is a key secular
driver for OSV demand for it encourages further offshore exploration
and drilling activities. OSVs will be required to support growth. Our
house economist forecasts oil price to average USD100/bbl in 2011
(WTI) and USD110/bbl in 2012. WTI crude ended last Friday at
USD106/bbl after touching a year high of USD109/bbl the week before.
All good things come to those who wait. Putting things into
perspective, the demand and supply disconnect for offshore vessels
should normalize in the later part of 2012. Utilisation rates are on the
rise, with the steepness of the increase depending on the type of
vessels.
OSV: Global AHTS term fixtures OSV: Global PSV term fixtures
2001 2003 2004 2005 2006 2007 2008 2009 20102002
(USD ‘000/day)4,000-9,999 bhp10,000-14,999 bhp15,000 bhp
70
60
50
40
30
20
10
50
(USD ‘000/day)
45
40
35
30
25
20
15
10
5
2001 2003 2004 2005 2006 2007 2008 2009 20102002
3,000- 3,999 dwt4,000+ dwt
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
6 March 2012 Page 32 of 60
Bumi Armada 17 October 2011
OSV: AHTS 4,000 – 6,000bhp dayrates vs. utilisation OSV: PSV 3,000 – 3,999 t dwt dayrates vs. utilisation
(USD ‘000/day) UtilisationDay rate
2001 2003 2004 2005 2006 2007 2008 2009 20102002
60
50
40
30
20
10
70
90
80
10025
20
15
10
5
(%)
60
50
40
30
20
10
70
2001 2003 2004 2005 2006 2007 2008 2009 20102002
60
50
40
30
20
10
70
90
80
100
(USD ‘000/day) UtilisationDay rate (%)
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
OSV: AHTS – average age profile (13.9 years) OSV: AHTS – average age of idle vessels (21.7 years)
64%
21%
15% 0-19 yrs
20-29 yrs
30 yrs+
34%
35%
31%0-19 yrs
20-29 yrs
30 yrs+
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
OSV: PSV – average age profile (12.6 years) OSV: PSV – average age of idle vessels (25.0 years)
73%
14%
13% 0-19 yrs
20-29 yrs
30 yrs+
29%
31%
40%0-19 yrs
20-29 yrs
30 yrs+
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
6 March 2012 Page 33 of 60
Bumi Armada 17 October 2011
OSV: Global market share by vessel demand OSV: Global market share by vessel supply
AHT6%
AHTS55%
PSV39%
AHT7%
AHTS54%
PSV39%
Sources: ODS-Petrodata, Maybank-IB Sources: ODS-Petrodata, Maybank-IB
OSV: Global supply & construction OSV fleet
Supply Vessels
83%
Construction
Vessels
17%
AHT7%
AHTS54%
PSV39%
Accomodation17%
Derrick8%
Diving Support
15%
Others7%
Pipelay/Derrick Pipelay
25%
ROV Support
28%
Sources: ODS-Petrodata,, Maybank-IB
OSV: Global demand – construction vessels by type
Supply Vessels
88%
Construction
Vessels
12%
AHT3%
AHTS84%
PSV13%
Accomodation31%
Diving Support
19%
Pipelay/Derrick Pipelay
37%
ROV Support
13%
Sources: ODS-Petrodata,, Maybank-IB
OSV: Global demand for AHTS, PSV and construction vessels – by region
41%
4%4%
3%
11%
25%
12%Asia Pac
Europe
N. America
Caspian & CIS
C&S America
Med & Mid East
West Africa
1,003 AHTS
13%
22%
22%
21%
11%
11%Asia Pac
Europe
N. America
C&S America
Med & Mid East
West Africa
716 PSVs
29%
21%13%1%
10%
11%
15%Asia Pac
Europe
N. America
Caspian & CIS
C&S America
Med & Mid East
West Africa
Sources: ODS-Petrodata,, Maybank-IB
6 March 2012 Page 34 of 60
Bumi Armada 17 October 2011
a) South East Asia’s OSV outlook
Malaysia, Indonesia and Vietnam are most likely to provide the
most opportunity for PSVs in the region as the number of operational
platform installations in the region is expected to increase incrementally
over the next five years.
Although the majority of installations are currently in shallow water
locations offshore these countries, the region is reflective of the global
offshore industry in that it is moving increasingly towards deep and
ultra-deepwater fields particularly offshore Malaysia.
South East Asia platform capex by region (2011 – 15)
Malaysia27%
Cambodia1%
Vietnam21%
Thailand12%Phillipines
5%
Indonesia26%
Myammar5%
Brunei3%
Sources: Infield Systems Limited, Maybank-IB
b) Malaysia’s OSV outlook
Malaysia is well-positioned as a regional deepwater centre.
Malaysia‟s deepwater activities, actively promoted by PETRONAS, are
expected to feature prominently in the industry‟s exploration and
production (E&P) development as it is one of the most effective ways to
increase reserves and production.
Deepwater to contribute 1/3 of Malaysia’s production. PETRONAS
expects the deepwater sector to contribute 30-40% of Malaysia‟s O&G
production over the next 10 years, in line with the growing trend in the
region. A total of 17 deepwater production sharing contracts (PSC)
have been awarded to-date, covering 119,000sq km. At present, only
one is at the production stage.
Deepwater blueprint offers visible roadmap. We gather that 8
deepwater projects will be implemented. The Kikeh field is Malaysia‟s
first deepwater production field, which was successfully commissioned
on 17 Aug 2007 with an oil production rate of 120,000 bpd presently.
The Gumusut-Kakap field is up next, by 2013.
PSVs to support deepwater projects. With the Gumusut-Kakap and
Malikai deepwater projects projected to come onstream soon, there will
be a need for PSVs to support the field production activities.
6 March 2012 Page 35 of 60
Bumi Armada 17 October 2011
As well as upcoming shallow water projects. Deepwater projects
aside, 65-70 new platform structures are required for shallow waters in
5 years. 22 new open shallow water blocks, covering over 240,000 sq
km are open and available for data review. Based on PETRONAS‟
announcement, there is a need to construct 65-70 (small and large)
fixed structures and platforms for its domestic operations over the next
10 years.
Malaysia’s deepwater reserves potential
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Gumusut-Kakap650 m bbl
Metres below sea level
Jangas81 m bbl
Malikai108 m bbl
Ubah Crest215 m bbl
Kamunsu401 m bbl
Pisangan56 m bbl
Sources: PETRONAS, Maybank-IB
Malaysia’s implementation of deepwater projects
2007 Future development field projects
Kikeh
Gumusut/Kakap
Malikai
Kebabangan
Jangas
Ubah Crest
Pisangan
Kamunsu
Indicative First Oil
Appraisal & Reservoir Evaluation
Project Implementation
Field Development Studies
Exploration
Exploration Strategy
Preliminary Engineering
Source: PETRONAS
6 March 2012 Page 36 of 60
Bumi Armada 17 October 2011
Malaysia’s planned oil production: Shallow and deepwater fields
0%
20%
40%
60%
80%
100%
2010A 2011F2012F
2013F2014F
2015F2016F
2017F2018F
2019F2020F
Deepwater fields Shallow water fields
Source: PETRONAS
PETRONAS’ deepwater blocks worldwide
OBO (Mauritania)
1 block
CBO (Mauritania)
2 blocks
CBO (Cuba)
4 blocks
OBO (Cameroon)
2 blocks
COB (Mozambique)
3 blocks
OBO (Malaysia)
11 blocks
COB (Myanmar)
3 blocks
OBO (Indonesia)
3 blocks
COB (Malaysia)
7 blocks
OBO (Greenland)
2 blocks
OBO (Egypt)
2 blocks
OBO (Mozambique)
1 block
OBO (Vietnam)
1 block
JOB (Malaysia)
1 cluster
●
●
●●
●●
●
Deepwater hotspot
Emerging hotspot
Carigali operated block (COB)
Operated by others (OBO)
Joint operated block (JOB)
●
●
●
North Sea
Offshore Brazil
Gulf of Mexico●
West Africa●
●●●
Source: PETRONAS
6 March 2012 Page 37 of 60
Bumi Armada 17 October 2011
c) West Africa’s OSV sector outlook
Positive. The West African market will hold a great deal of positive
news for OSV players, in particular companies with high class AHTS.
New platform-driven growth. This is attributable to the rise in platform
projects over the next 5 years through new platform installations,
primarily in offshore major countries such as Angola, Nigeria as well as
emerging countries like Gabon and Ghana.
West Africa platform capex by region (2011 – 15)
Cameroon6%
Congo6%
Eq. Guinea6%
Gabon3%
Angola35%
Ghana4%
Ivory Coast1%
Nigeria36%
Sierre Leone3%
Sources: Infield Systems Limited, Maybank-IB
d) Latin America’s OSV sector outlook
Brazil to anchor growth. There is expected growth in O&G investment
for platforms and subsea assets in Latin America over the next 5 years.
Majority of the capex will be concentrated in Brazil, taking up 68% of
the capex in the region.
As well as Mexico and Venezuela. Mexico and Venezuela will also
see increasing demand for PSVs with new platform installations as well
as increase in the cumulative base of existing operational platforms as
PDVSA and PEMEX increase shallow water platform investments.
Latin America platform capex by region (2011 – 15)
Argentina
1%
Brazil68%
Chile1%
Mexico11%
Peru1%
Trinidad5%
Venezuela13%
Sources: Infield Systems Limited, Maybank-IB
6 March 2012 Page 38 of 60
Bumi Armada 17 October 2011
e) Offshore accommodation market outlook
Growing demand to support brownfield projects. The bulk of
accommodation services will be required in the shallow waters and
demand here is benign due to intermediate environmental conditions,
driven by aging infrastructure. However, high-end vessels capable of
working in intermediate and harsh conditions should see some growth
in demand in later years.
Vessels with DP hardware will be preferred. It is anticipated that
more and more DP2 and DP3 high-end vessels will enter the market
looking to capture the niche market. Region-wise, Brazil will require
high-end accommodation vessels for its ultra-deepwater works. In North
Asia, development at the South China Sea and Bohai Bay by Chinese
NOCs and the international partners will likely underpin accommodation
activities. In South East Asia (Malaysia, Indonesia, Thailand), majority
of the forecasted demand is targeted for IRM services. Notwithstanding
that, platform installations are also expected to drive demand for this
type of vessel.
3. Opportunities for Bumi Armada
We view the PSV and accommodation workbarge/boat markets as
a compelling opportunity for Bumi Armada. Africa and Latin America
(notably Brazil) will likely be its key markets for its future fleet expansion
programme.
8-10 new vessels planned. We expect Bumi Armada to add 8-10 new
vessels, a balanced combination of PSVs, MPSVs and accommodation
units over the next 2 years to capitalize on the strong demand for higher
spec OSVs.
Prospects for securing good charters are high. One of the PSV (to
be built by Nam Cheong for USD30m with an end-2012 delivery date)
will be contracted for the Gumusut-Kakap deepwater project on a long
term basis, which is expected to come onstream in 2013. This initial win
establishes Bumi Armada as a deep water PSV vessel operator and
bodes well for its prospects for further deepwater jobs.
Expecting high utilization for newbuilds. We opine that utilization
rates for the newbuilds (PSV and accommodation workbarges) will be
high and contracted on long-term charters.
Utilisation set to improve for the existing vessels too. Utilisation
rates for its existing fleet of vessels are also expected to improve in
2012, in our view, as demand picks up. Utilisation rates, in our view are
expected to increase by 0.5-1.0% per month throughout 2012 with a
target utilization rate of around 80% from 70% presently.
6 March 2012 Page 39 of 60
Bumi Armada 17 October 2011
T&I: Fundamentals and prospects
1. Industry’s fundamentals
The Caspian region offers robust potential. The region, accounting
for 20% and 45% of the world‟s oil and gas reserves respectively, is
one of the most important drivers of O&G production growth.
O&G developments in Russia (notably the Vladimir Filanovsky
development) and Kazakhstan (Kashagan field) are expected to
drive these regions to become big buyers of topsides in the near
future. Turkmenistan, bordering Kazakhstan in the north and Iran in
the south, also offers potential.
Majority of the demand is expected to be for pipelay vessels
(derrick lay barges (DLB), in particular for the interlinking cluster
developments in Kazakhstan and Azerbaijan (Kashagan and Azeri
projects) as well as Turkmenistan and Russia.
Key Caspian Sea development projects
Project Country Reserves (mmboe)
Start-up date
Est. Peak Production
('000 bpd)
Est. Peak Date
Operator Production facilities
Kashagan Kazakhstan 10,285 2013 1,500 2023 NCOC Artificial Island
ACG Azerbaijan 4,367 1997 1,030 2011 BP Fixed platform
Shah Deniz (gas) Azerbaijan 2,930 2006 510 2018 BP Fixed platform
Severnyi Russia 2,608 2010 370 2024 LuKoil Fixed platform
Livanov Turkmenistan 1,664 2006 250 2021 PETRONAS FPSO/ fixed platform
SOCAR Assets* Azerbaijan 1,190 1949 410 1981 SOCAR Fixed platform
Khvalynskoye (gas) Kazakhstan-Russia 898 2016 90 2018 LuKoil Fixed platform
Cheleken Turkmenistan 833 1972 125 2015 Dragon oil Fixed platform
Kalamkas More Kazakhstan 720 2018 160 2021 NCOC Fixed platform
Pearls Kazakhstan 463 2018 100 2023 CMOC Fixed platform
Sources: Wood Mackenzie, Maybank IB; * State Oil Company of Azerbaijan
DLB vessel demand in the Caspian region
Azerbaijan
54%
Kazakhstan11%
Russia22%
Turkemenistan13%
Sources: Infield Systems Limited, Maybank-IB
6 March 2012 Page 40 of 60
Bumi Armada 17 October 2011
A duopoly market; with good day rates and long-term charters.
With the Caspian Sea almost a closed off market, as harsh winters,
render the region landlocked for much of the year, having a vessel
within the market is a key competitive advantage for operators. Only
two pipelay vessels are currently available in the region, one operated
by Momentum Group (Israfil Huseynov) and another by Bumi Armada
(Armada Installer). Given the limited number of players, dayrates and
utilization rates are expected to remain healthy over the next five years.
Caspian Sea heavy lift demand & supply Caspian Sea pipelay demand & supply
0
2
4
6
8
10
12
14
16
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Lay demand Lay supply(Vessel Days)
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Heavy Lift Demand Heavy Lift Suppy(Vessel Days)
Source: Infield Systems Limited Source: Infield Systems Limited
2. Opportunities for Bumi Armada
Armada Installer is on a firm 8-year charter to PCSB on attractive
terms. Petronas Carigali Sdn Bhd (PCSB) has guaranteed a minimum
number of hire days for the vessel. We estimate 60-70% utilization of
the vessel for the duration of the contract. This makes vessel cost
payback likely. We note that the guaranteed minimum hire days clause
kicks-in only in the fourth quarter of each final year (Oct-Dec).
Armada Installer can also bid for other jobs simultaneously. More
importantly, Bumi Armada is free to bid the vessel for works from the
other operators, i.e., Dragon Oil, BP, Lukoil etc., during the remaining
days ex- maintenance time. 7 projects are in various stages of
completion and another 3 major projects have been lined up in the
immediate future, providing Armada Installer great earnings visibility.
Enter the Dragon. Of particular interest to investors would be the
Cheleken field where Dragon Oil plans to spend USD1b from 2012 to
2015. Its upcoming projects encompass multiple jack-up platforms, at
Zhdanov A & B and Lam D, E, F and G, and this greatly solidifies the
visibility of the Armada Installer‟s order flow.
Anticipating higher utilization rates for the Armada Installer. There
could be much opportunity for Bumi Armada in the Dragon Oil T&I
projects as the Armada Installer (which is 2 years old) is arguably a
better candidate, being a younger and more modern vessel compared
to its rival; Israfil Huseynov – a 20-year old pipelay barge.
With elevated earnings. We estimate that clinching such jobs would lift
Armada Installer‟s utilization up beyond the 90% threshold (from 70%
currently), effectively raising revenue by RM9m p.a., based on an
average rate of USD70,000/day for 62 operating days.
6 March 2012 Page 41 of 60
Bumi Armada 17 October 2011
New assets to drive T&I earnings. Bumi Armada acquired the Acergy
Hawk (now named Armada Hawk) in June 2011. Thus far the vessel
has worked on riser installations for the FSO Sepat and will spearhead
bids for SURF installation and IRM projects in Asia. We expect Bumi
Armada to add a third vessel, similar to the Armada Hawk in 2012,
which would contribute about RM60m-90m in revenue p.a., assuming
USD70,000 dayrates. Moreover, Bumi Armada can fit an existing AHTS
– Tuah 104 with an A-frame to undertake T&I works.
Major projects worldwide SURF contracts
2010 2011 2012 2013
Contract Value
(USD m)
Contract Value
(USD m)
Contract Value
(USD m)
Contract Value
(USD m)
1 Block 17-CLOV 1,300 Greater Gorgon 945 Egina 1,300 Wahoo 928
2 Roncador 3 520 Lula Nordeste 650 Caricoa 960 Block 31 South East 920
3 Laggan Tormore 250 Liwan 585 Tweneboa 850 Browse LNG 783
4 Mars B 230 Block 15-06 460 Cernambi 656 Leviathan 750
5 Tamar 420 Guara-Phase 2 544 Wheatstone LNG 657
6 Guara-Phase 1 416 Gehem 450 Franco-FPSO 2 592
7 Barzan Phase 1 400 Ichthys 450 Iara-FPSO 1 496
8 Jack/St. Malo 300 Franco-FPSO 1 448 Moho Bilondo 2 320
9 Big Foot 230 Gendalo 360 Florim 288
10 Lucius 220 Shtokman 300 Rosebank 240
11 Prelude 180 Nsiko 300 Shenandoah 230
12 Papa Terra 150 Baleia Azul 288 Jubilee FPSO 1 220
13 Clair Ridge 90 Freedom 160 Pluto LNG 2 198
14 Waimea –OSX 1 68 Myammar M-9 131 Vito 190
15 West Nile Delta 125 Abadi LNG 126
16 Pipeline 100
17 Mad dog 100
18 Waimea 68
Total 2,300 5,114 7,197 6,812
Sources: Instok, Maybank-IB
Major subsea markets world wide Malaysia’s subsea market by definition
-
2,000
4,000
6,000
8,000
10,000
12,000
2010 2011 2012 2013 2014
Angola Australia Brazil
Nigeria UK GOM
(USD' m)
111157
276 254 243166
404
559
1,093
0
200
400
600
800
1,000
1,200
2004 2005 2006 2007 2008 2009 2010F 2011F 2012F
SURF Subsea Equipment(USD' m)
Source: Instok Source: Instok
6 March 2012 Page 42 of 60
Bumi Armada 17 October 2011
OFS: Fundamentals and prospects
1. Industry’s fundamentals
PETRONAS’ capex blueprint denotes growth. PETRONAS is
projected to spend about RM250b in capex over the next 5 years
(2011-15). This equates to an average investment of RM50b p.a., which
is 25% higher than its 2010‟s spending. The bulk of its capex spending
will be redirected to domestic field development as it intensifies
exploration and development activities in the deepwater, shallow, brown
and marginal fields to lift production.
PETRONAS’ domestic strategy. On its E&P efforts, PETRONAS will
focus on:
(i) unlocking stranded resources by fast-tracking the development of
marginal fields projects,
(ii) improving enhanced oil recovery (EOR) efforts to optimise
existing fields‟ resources, and
(iii) intensifying exploration efforts to further grow its hydrocarbon
resources.
PETRONAS’ 3-prong strategy
Source: PETRONAS
PETRONAS’ targeted fields
Source: PETRONAS
6 March 2012 Page 43 of 60
Bumi Armada 17 October 2011
2. Outlook: Marginal field developments
Positive outlook. The countries in Asia Pacific, such as Malaysia,
Indonesia, Thailand, Vietnam and India offer the most promising
prospects, in terms of marginal field development. The growth is driven
by Government incentives.
Marginal field development plans in Asia Pacific
Country Marginal fields Outlook
Malaysia 90 hotspots identified, 25 to be developed
Positive outlook. Several projects have been announced (Sepat, Berantai). More to follow.
Indonesia 160 O&G fields identified Positive outlook. Government has identified 100 oil fields and 60 gas fields for development.
Thailand 40 O&G fields identified Positive outlook. Marginal fields are attracting more investors.
Vietnam 20 O&G fields identified Positive outlook. The government is developing marginal fields in Cuu Long basin in an effort to
boost production.
Australia 10 O&G fields identified Positive outlook. New innovative concepts have been developed to explore marginal fields, which are economically viable.
New Zealand 165 new marginal fields identified
Positive outlook. Government is keen on rapid development of smaller, economically marginal fields to meet country‟s energy deficit.
India 165 new marginal fields identified
Positive outlook. 44 fields have been monetized. 90 fields are in the process of being put to production.
China 30 O&G fields identified Moderate outlook. Progress on marginal fields has been restricted due to unfavourable PSC
conditions and tight government controls.
Sources: Origin Business Engineering B.V., Maybank-IB
Marginal field development to see rapid progress in Malaysia.
PETRONAS will adopt the fast track approach to execute its marginal
field projects, as it aims to secure 1st oil and/or gas as fast as possible
(within a 12-month period) with minimal capex and infrastructure
requirement. Development will be through innovative solutions.
PETRONAS will develop 25 domestic marginal fields as it seeks to
reverse declining output of Malaysia‟s existing reserves. The marginal
oil fields have 30m barrels of oil reserves and unlocking these fields is
expected to raise Malaysia‟s crude oil production by 55,000 bpd
(+10%). The capex required to develop a marginal field is around
USD800m and the breakeven cost is estimated at USD70/ bbl.
Marginal fields to be developed via the RSC model. The marginal
field programmes will be developed via Risk Sharing Contracts (RSC)
and not the conventional Production Sharing Contracts (PSC) accorded
to oil majors participating in Malaysia‟s major O&G fields. The RSC is
aimed at making the project viable and attractive for smaller
independent oil companies (IOCs).
PETRONAS has kicked off marginal field development, more to
emerge. The first two pilot projects, Berantai and Sepat, have been
rolled out and we anticipate 2 more (Balai and Bentara) to be awarded
soon. It is understood that at least 5 more hydrocarbon discoveries are
being looked at. The fields under consideration are said to include the
Cenang and Tembikai gas discoveries near Talisman Energy operated
Block PM 314. The other finds – Diwangsa, Rabung, Korbu, Desaru
and Jambu could also be on the table.
6 March 2012 Page 44 of 60
Bumi Armada 17 October 2011
3. Outlook: Enhanced Oil Recovery (EOR) projects
Enormous potential. Existing brownfields also offer an abundance of
opportunities. EOR potential in Malaysia is massive and is estimated to
be approximately 1b stock tank barrels. Existing fields will be
rejuvenated through enhanced oil recovery (EOR).
166,000 bpd, 1,000 idle wells, 955m bbls, 37 fields... Malaysia aims
to boost brownfield production by 166,000 bpd (+30% increase to
current total production) come 2020 using new EOR technologies.
There is an est. 955mboe trapped in 37 brownfields with 1,000 idle
wells. 60% of total EOR potentials in Malaysia reside in 6 reservoirs.
They are the Tapis, Guntong Upper, Guntong Lower, St Joseph, Tiong,
and Dulang fields. The crucial factor would be boosting the average
recovery factor to 45-55% from the current average of 36%.
Snapshot of Enhanced Oil Recovery (EOR)
Tapis Lower J
Guntong Upper I
St. Joseph B/G
Tiong J - 20/21
Guntong Lower I
Dulang E-12/3 (pilot stage)
Dulang E - 14 (pilot stage)
0
50
100
150
200Total potential: 955 MMstbNumber of reservoirs: 37Average size: 26 MMstb
CO2 miscible
Water Flood
HC miscible
Others
Group 1:570 MMSTB (60.4%)
Other potential reservoirs:374 MMSTB (39.6%)
Source: PETRONAS
...3x times larger than marginal field plans...The ultimate goal,
according to PEMANDU, is to add 220,000 bpd of oil from EOR
initiatives and marginal fields – accounting for 1/3 of domestic
production. The greater emphasis on brownfields stems from the
“relatively” easier, faster and lower incremental cost per barrel of
increased production. The ultimate winner we feel will be the company
able to deliver executable, cost effective and quick to deploy solutions.
...with RM45.9b capex committed. Petronas & Shell‟s EOR projects
for St. Joseph, South Furious (SF30), Barton and the Baram Delta
Operations (BDO) call for USD12b (RM36b) in investments to develop
the 9 fields of Sarawak and 4 fields in Northern Sabah. Meanwhile,
Exxon will be rehabilitating the Tapis (RM3.2b), Guntong, Tabu, Palas,
Seligi, Irong Barat and Semangkok fields (RM3.6b) and 2 mature gas
fields, Jerneh & Lawit Bintang (RM3.1b) off the peninsular.
6 March 2012 Page 45 of 60
Bumi Armada 17 October 2011
4. Opportunities for Bumi Armada
(i) Angsi EOR project. This is a fast-track project. PETRONAS
has set a target to commence operations by Sept 2013. It
requires a vessel-based sea-water reverse osmosis (SWRO)
plant (CEOR floater) with the capacity to desalinate
150,000bpd of seawater to increase oil recovery rates by
another 20%.
Water Standard to team up with local operator(s). US-based
Water Standard won the oilfield desalination project and will
likely partner an FPSO operator for this job. Conversion work is
expected to take 16 months to complete.
Potential winners. Bumi Armada, SapCrest Kencana
Petroleum, Uzma and Deleum are the names mentioned. We
think Water Standard could team up with one to two local
partners due to the massive capex and job scope.
Angsi: An immediate target for PETRONAS’s CEOR vessel
Sources: PETRONAS, Maybank-IB
(ii) St Joseph EOR. This is a similar project to Angsi but requires
a smaller SWRO unit. The project requires the vessel to handle
an initial 10,000bpd water and chemical injection during the
pilot phase (12 months). If this is successful, the vessel will
undergo modification to triple its injection capacity to
30,000bpd.
Requires a 30,000bpd SWRO now with an Angsi size unit
to follow. Unlike the Angsi field, the main asset (i.e. vessel) will
be owned by Shell with the winner earning project management
fees. However Shell intends to source a larger vessel when the
economic viability of the project has been ascertained, to
support the full field injection of 15,000bpd.
Relocation from Angsi to Sabah? We understand from
discussions with O&G service providers that chemical alkaline
surfactant polymer treatments are normally carried over a 3-4
year period. Based on the 150,000bpd processing capacity
required for the „Angsi SWRO unit‟, we estimate the vessel hull
size could at least be an aframax tanker (market price RM60m-
70m per unit). Considering the modifications and quantity of
topside equipment required we think it likely the same floater
6 March 2012 Page 46 of 60
Bumi Armada 17 October 2011
will be utilised at both fields, consecutively, allowing the capex
to be depreciated gradually.
Bidders and potential winners. Bumi Armada and six other
operators (BW Offshore, MISC, M3nergy, SapuraCrest,
Deleum and Tanjung Offshore) have been invited by Shell to
bid for an EPCIC contract to supply a CEOR vessel for the St
Joseph pilot project off Sabah. However, only two bidders
remain – Bumi Armada and Deleum.
Snapshot of 13 BDO & North Sabah oilfields to be developed
Sabah
Sarawak
EOR Project1. USD12b investment over 30 years
2. To develop 9 fields in the Baram Delta, Sarawak
and 4 fields in North Sabah
3. To recover 756m bbl of oil or 90-100k bopd4. To improve average recovery factor to 50%
5. To extend fields’ productive life to beyond 2040
St.
Joseph
South Furious 30
Barton
South
Furious
Bakau
West Lutong
Baronia
BaroniaBaratBetty
Bokor
Tukau
Sikau
Siwa
Source: Maybank IB
(iii) Tanjung Baram. Meanwhile, the Tanjung Baram EPS project,
awarded to a foreign party, is running into complications and
will likely miss the first oil production target (1,000-3,000bpd)
set for Jul 2012. A re-tender could recur should the issue
remain unresolved.
6 March 2012 Page 47 of 60
Bumi Armada 17 October 2011
SECTION 3: FINANCIALS, VALUATION, RISKS
6 March 2012 Page 48 of 60
Bumi Armada 17 October 2011
Financials
Registered robust profits in the past. Bumi Armada delivered a
RM277m net profit in 2009 (+85% YoY), RM351m in 2010 (+25% YoY)
and RM387m in 2011 (+10% YoY). These translate to a robust 3-year
historical net profit CAGR of 37% (2009-11).
Poised to break new ground. Looking ahead, we expect the earnings
trajectory to continue its climb, at least over the next 3 years, on the
back of stronger profits from all core divisions, namely FPSO, OSV and
T&I operations.
Set to enjoy strong and sustained growth. We project a strong 3-
year net profit CAGR of 25%, forecasting that Bumi Armada will deliver
a net profit of RM532m in 2012 (+37% YoY), RM628m in 2013 (+18%
YoY) and RM707m in 2014 (+13% YoY).
Growth will be driven by:
(i) 3 new FPSOs progressively coming onstream. We expect Bumi
Armada to secure 3 FPSO contracts in 2012-13 (i.e. Malaysia, India
and Angola). We expect the group to own a fleet of 8 FPSOs by
end-2013, elevating it to becoming the fourth-largest FPSO
operator worldwide by then.
(ii) OSV expansion and higher utilisation rates. We project Bumi
Armada will take delivery of 2 PSVs in 2012 and another 4
newbuilds in 2013-14. Expectation is for these new vessels to
generate revenue of RM29m-RM213m p.a. in total, lifting OSV‟s
topline by 6-28% respectively in 2012-13.
In terms of utilisation rates, we expect a progressive step-up, from
79% in 2012 (+7-ppt YoY) to 83% in 2013 (+4-ppt YoY). Growth will
largely be driven by higher charter days for its 8,000-12,000 bhp
AHTS and PSVs.
(iii) T&I’s Dragon Oil contract and contributions from new vessels.
In the T&I segment, we have assumed Bumi Armada will secure the
Dragon Oil T&I contract in the Caspian Sea. Bagging this project
will elevate utilisation of Armada Installer from 70% to above 90%.
With Bumi Armada taking delivery of Armada Hawk in 2H 2011 and
another SURF vessel by 2012 to participate in the IRM projects in
Asia, we project growth of the T&I EBIT at RM184m-RM190m p.a.
in 2012-14 respectively, and at RM117m in 2011 to
(iv) OFS division is the wild card. With the delivery of the one-off
Sepat FSO project, Bumi Armada aims to move to a recurring
income business model via the Angsi SWRO vessel projects. We
expect this project, to be awarded by 1H12, to generate EBIT of
RM56m p.a..
Optimised earnings impact from 2015. Putting things into
perspective, we expect Bumi Armada to enjoy the full effect of its
underlying strong earnings-generating assets in 2015. This will notably
come from the 3 new FPSOs, as the O&M charter rates kick in.
6 March 2012 Page 49 of 60
Bumi Armada 17 October 2011
Snapshot of assets growth FYE Dec (RM m) 2010A 2011A 2012F 2013F 2014F
Assets (unit)
- FPSO (contract signed) 3 5 7 8 8
- OSV 37 46 48 50 50
- T& I 1 2 3 3 3
Total 41 53 56 61 61
Utilisation rate (%)
OSV
- AHT 87 87 73 77 77
- 5,000 bhp AHTS 70 83 85 85 85
- 8,000 – 10,000bhp AHTS 50 45 73 83 83
- 12,000 bhp AHTS 100 100 100 100 100
- Workbarge/ boat 80 74 88 95 95
- PSV - 90 90 90 90
- Others 73 83 80 80 80
T&I
- Armada Installer 70 75 92 92 92
- Newbuild (2) - 95 95 95 95
Sources: Company, Maybank-IB
Not ruling out further upside potential. We do not discount the
possibility of Bumi Armada adding another new small-to medium-sized
FPSO beyond the projected 3 units, which would effectively lift its
FPSO fleet size to above 8 units. In our modeling, we have also not
imputed the expectation of any other production floaters (i.e. FSO).
Overall, we opine Bumi Armada has the balance sheet, skill sets and
appetite to undertake this.
Has the ability for growth. Our forecasts suggest that Bumi Armada‟s
net gearing level will range between 0.5x and 0.6x in 2012-14. This is
below the internal threshold of 1.5x set by management. Hypothetically
gearing up to 1.5x in 2012 could effectively lift borrowings by RM3.5b
(i.e. 3-4 FPSOs).
Has the balance sheet to take up another FPSO. We estimate that
taking on the extra debt will still be sufficient for Bumi Armada to fund
the expansion for a small-sized FPSO. As a benchmark, the capex to
construct/convert a small-sized FPSO from a tanker (<80,000 bpd
capacity) would range between USD300m-USD500m. The cost to
modify an existing smaller unit is estimated at USD100m-USD250m.
Segmental breakdown FYE Dec (RM m) 2010A 2011A 2012F 2013F 2014F
Revenue 1,241.4 1,543.9 1,800.7 2,220.6 2,504.3
- FPSO 553.4 609.2 743.9 965.4 1,097.4
- OSV 419.7 481.9 622.6 686.1 688.4
- T& I 268.3 242.3 334.2 334.0 344.8
- OFS 0.0 210.5 100.0 235.0 373.8
EBIT 467.1 518.3 621.8 745.7 835.2
- FPSO 179.2 200.2 227.5 260.6 330.2
- OSV 88.9 116.8 175.0 207.2 221.0
- T& I 148.5 117.2 183.8 183.7 189.6
- OFS 22.7 21.0 13.0 40.8 69.3
Sources: Company, Maybank-IB
6 March 2012 Page 50 of 60
Bumi Armada 17 October 2011
Significant capex going forward. Bumi Armada will spend heavily on
capex (RM6.7b in total, in 2011-15) to fund its expansion programmes.
As such, we do not expect significant dividend payout in the near term.
Bumi Armada: Capex profile
0.50.7
0.8
0.50.3 0.1
0.20.4
0.2
1.2 1.4 1.1
-0.1
0.1
0.3
0.5
0.7
0.9
1.1
1.3
1.5
2008 2009 2010 2011-14
FPSO OSVs T&I Others(RM b) RM6.7b
Sources: Company, Maybank-IB
Progressive dividend policy. Management intends to adopt a
progressive dividend policy in determining the level of dividend
payment, with the level of cash, gearing, debt profile, retained earnings,
capex and investment plans to be taken into consideration.
Projected capex for FPSO orders: Capex to build/convert FPSOs varies widely,
depending on unit size, complexity and application.
Large FPSOs:
A large 150,000+ bpd FPSO intended for use offshore Africa or Brazil
can cost USD1b to USD2.2b.
As benchmarks, capex for the Clov FPSO is USD1.8b, Usan USD1.6b,
Pazflor USD2.1b and the P62 and P63 FPSOs are around USD1b.
Given the expected mix of future orders of large FPSOs, the notional
capex of USD1.2b is a reasonable average cost to build such a unit.
Mid-size FPSOs:
An 80,000-150,000 bpd unit can range from USD0.4b to USD1.4b.
As benchmarks, capex for the P.C. de Itajai conversion is estimated
around USD400m. Goliat, designed for harsh environment is USD1.1b,
Quad 204 is USD1.3b.
The notional capex of USD0.6b to build or convert or convert a unit and
USD0.3b to modify/upgrade an existing vessel is representative of the
average capex for midsize FPSOs.
Small-size FPSOs:
A >8,000 bpd unit can range from USD300m to USD500m.
As benchmarks, the Chim Sao capex was USD400m. Cost to modify a
smaller unit is around USD100m - USD200m.
The cost to modify/ upgrade East Fortune for Berantai is about
USD345m. Modifying/ upgrading Glas Dowr for Kitan is around
USD120m-USD150m, the OSX1: USD200m.
The notional capex of USD0.4b to build or convert a small FPSO and
USD0.2b to modify/ upgrade an existing vessel.
Source: International Maritim Associates, Inc
6 March 2012 Page 51 of 60
Bumi Armada 17 October 2011
Valuations
Target price: RM4.88. Our target price is based on a sum-of-parts
(SOP) valuation.
The FPSO, OSV, T&I and OFS (i.e. SWRO unit) operations are
valued based on discounted cash flows (DCF), using a WACC
of 4.5%. DCF is a reasonable method, in our view, considering
that FPSO contracts are typically chartered out on a long-term
basis (7 years + option period) while the OSVs, T&I and OFS
vessels tend to see 1-8 year contracts.
We value the OFS‟ EPCC operations on price-earnings
multiples.
We ascribe a scrap value to their assets (i.e. FPSO, OSV, T&I
and OFS) based on an estimated scrap steel tonnage.
At our RM4.88 target price, Bumi Armada would be trading at 26.8x
2012 PER which is not excessive in our view, considering we are
expecting a strong 3-year net profit CAGR of 25%.
SOP valuations
Terminal growth rate
Division Value
(RM’m) Value
(RM/share) Methodology
FPSO 6,585 2.25 DCF
OSV 4,871 1.66 DCF
T & I 3,528 1.20 DCF
OFS 385 0.13 DCF on SWRO unit and 10x PER on EPCC
Scrap value 638 0.22 FPSOs, OSVs, T&Is
Net debt (1,760) (0.60) 2011
Total 14,291 4.88
Source: Maybank-IB
Key assumptions to our WACC estimate are laid out in the table
below, where we have applied a 4.0% risk-free rate, 6.5% market risk
premium and 1.0 beta. We have assumed a long-term: (i) 80:20 debt-
to-equity structure and (ii) cost of debt of 3.0%
Assumptions and basis used for WACC discount rate
Risk free rate Rf 4.0% 10-year government bond yield
Long-term cost of debt Kd 3.0% Average 3.0% effective interest rate
(Maybank IB‟s forecast)
Market risk Rm 10.5% Maybank IB‟s in-house assumption
Beta β 1.0
Target capital ratio
- Debt / (debt + equity) Wd 80% Target gearing
- Equity / (debt + equity) We 20% 1 – target gearing
Cost of equity Ke 10.5% = Rf + (Rm – Rf) β
WACC Wc 4.5% = Kd (1-tax) (Wd) + Ke (We)
Source: Maybank IB
6 March 2012 Page 52 of 60
Bumi Armada
Peers valuations: FPSOs
FPSO operator peer comparison (Calenderised)
Company Market Cap 3-yr EPS 3-yr EBITDA EV/ EBITDA EV/ EBIT PER Div yield Gearing ROE P/ BV
(USD m) CAGR (%) CAGR (%) (x) (x) (x) (%) (x) (%) (x)
2011 2012 2013 2011 2012 2013 2011 2012 2013
SBM Offshore 3,446.6 25.0 11.8 6.7 6.3 5.7 68.4 9.9 9.1 8.1 7.6 6.7 6.2 0.9 21.1 1.9
BW Offshore 985.0 76.0 37.9 8.7 6.2 5.2 21.0 14.3 11.3 nm 9.1 7.1 8.7 1.1 8.5 1.2
Modec Inc 868.4 28.6 nm 18.7 16.5 11.4 nm 29.3 24.4 22.7 16.0 11.9 1.8 0.4 8.5 1.0
Fred Olsen 143.8 nm nm 5.5 4.8 4.3 17.2 18.6 16.7 nm nm nm 7.4 0.0 0.5 0.8
Sevan 127.5 nm nm
22.3 12.8 nm nm 12.6 nm nm nm nm - 1.5 0.9 0.7
EOC 117.5 8.7 4.2 7.3 6.3 6.5 12.6 10.1 11.0 4.9 3.2 3.4 - 1.9 11.0 0.2
Simple Average 11.5 8.9 6.6 29.8 15.8 14.5 11.9 9.0 7.3
Selected peers average (weighted) 7.7 6.3 5.4 44.7 12.1 10.2 8.1 8.3 6.9
Sources: Bloomberg, Maybank-IB Note: *Acquired Prosafe Productions in Dec 2010, 2011-13 net profit CAGR: 20%
Peers valuations: T&I and OSV operators
FPSO operator peer comparison (Calenderised)
Company Market Cap 3-yr EPS 3-yr EBITDA EV/ EBITDA EV/ EBIT PER Div yield Gearing ROE P/ BV
(USD m) CAGR (%) CAGR (%) (x) (x) (x) (%) (x) (%) (x)
2011 2012 2013 2011 2012 2013 2011 2012 2013
Saipem (T&I) 22,212.53 13.2 12.5 8.9 8.4 7.1 12.7 12.1 10.2 18.2 16.3 13.9 2.2 1.0 21.06 3.6
Technip (T&I) 11,908.49 19.3 17.4 8.7 8.2 6.3 10.8 10.4 7.9 17.2 17.2 13.6 1.0 1.0 21.06 2.5
Subsea 7 (T&I)* 8,176.78 148.6 160.4 8.9 7.1 5.0 13.6 10.0 6.9 18.7 16.3 11.8 0.8 0.1 8.47 1.4
Farstad (OSV) 1,149.6 19.2 9.4 7.6 7.4 6.9 11.9 11.4 10.7 11.5 10.3 8.7 3.0 0.8 8.57 1.0
Ezra (OSV) 889.6 20.9 41.1 18.3 13.5 11.3 25.5 17.6 14.6 16.7 10.8 8.0 0.4 1.1 8.50 1.0
Solstad (OSV) 723.8 110.9 20.6 10.9 7.7 6.8 27.0 15.1 12.9 11.6 9.0 3.1 1.9 7.41 0.9
T&I average 8.8 7.9 6.2 12.4 10.8 8.4 18.1 16.6 13.1
OSV average 12.3 9.6 8.3 21.5 14.7 12.8 14.1 10.9 8.6
Sources: Bloomberg, Maybank-IB Note: *Acquired Acergy
6 March 2012 Page 53 of 60
Bumi Armada 17 October 2011
Risk factors
Bumi Armada‟s wide ranging business profile opens the group to a
broad spectrum of operational, geographical and environmental risk.
Operating in multiple countries and compliance with additional local
regulations may hamper operations and increase operating costs.
Below is a non exhaustive list of the major risk factors confronting Bumi
Armada.
Oil price levels affect long-term investment plans. Oil majors‟
investment plans are dependent on long-term oil price expectations,
which can be affected by low and/or volatile oil price levels. We have
seen oil field exploration/developments shelved when the oil price fell
below USD50/bbl (average) in 2008, and there is no certainty this will
not recur. Our economics team projects an average USD100/bbl crude
oil price (WTI) in 2012 (2011: USD95/bbl).
Currency fluctuations. Revenue from customer contracts, capex and
operating cost is largely denominated in USD which do provide for
some form of a hedge (but not in full). In addition, Bumi Armada reports
results in RM, which leaves the group open to foreign currency
movements especially fluctuations of the USD against the RM. We
estimate that a 1 sen strengthening or weakening of the RM against the
USD to impact bottomline by RM2m (with 0.4% of its earnings in RM).
Financial leverage. Bumi Armada has and will maintain a significant
level of leverage in line with the industry norm. Refurbishments are
made before each redeployment of FPSOs and the vessels will require
extensive repairs at regular intervals to meet the operating certification
needed. High debt service and other contractual obligations will render
Bumi Armada highly sensitive to any interruption in cashflows.
Contractual requirements. FPSO contracts can encompass turnkey
contracts for the vessel‟s construction, conversion and refurbishment.
Turnkey: FPSO conversions and refurbishment projects involve
significant procurement of equipment, supplies and equipment. Risk
include lack of supply of, or higher than expected cost of materials,
equipment and manpower.
Delivery: FPSO contracts have strict delivery schedules and failure
to adhere to set dates could result in lower daily charter fees or
even late penalties.
Dependence on external parties: FPSO operators can be heavily
dependent on vendors throughout the process, from equipment and
manpower to even yard space.
Cost overruns: Historical FPSO projects‟ cost overruns were often
tied to increases in price or requirements of manpower, fabrication
materials (e.g. steel) or additional requirements or changes in
orders from clients (VO). Unless protected by a price escalation
clause, Bumi Armada may face reduced earnings or even losses.
6 March 2012 Page 54 of 60
Bumi Armada 17 October 2011
Performance: Post deployment, the FPSO would be required to
maintain a pre-agreed commercial uptime, technically possible
operating days less allowance for maintenance and emergencies.
Failure to meet the set targets could result in reduced charter fees,
suspension of charter fees or even penalties being imposed.
Early termination: Lease contracts are structured to provide the
lessor with flexibility. Firm contracts are only offered for the
estimated time required to exploit reserves but vessels have to be
configured with the potential full period in mind. Should the
termination of the contract occur and Bumi fail to redeploy the
vessels on time, Bumi could suffer both reduced income and even
impairment charges on its FPSOs
External factors/events: This comprises weather and natural
hazards (typhoons, tsunamis, etc), pirate attacks (more likely
kidnap of crew and shutdowns versus hijacks) and policy changes
of governments.
Regulatory risks. As Bumi Armada operates worldwide, it must adhere
to the offshore O&G industry regulations across multiple areas:
Local content: Several emerging countries are attempting to boost
local industries i.e. fabrication, process equipment, etc. by
introducing local content clauses. This includes Nigeria, Angola,
Brazil and Malaysia, which require portions of the system to be
fabricated at the local facilities.
Environment: Bumi Armada‟s single hull FPSOs cannot operate in a
number of regions (North America and Europe) and the number of
areas are set to increase. Aside from hull requirements, rules
relating to waste storage and discharge, carbon emissions, etc. will
have an impact on Bumi Armada‟s operating expenses.
Cabotage: Bumi Armada‟s vessels (FPSOs and OSV) must comply
with each country‟s licences, permits and certifications. Failure to
comply could result in fines or vessel seizure. For example, Nigeria
requires annual renewal of all license and imposes fines of up
RM300,000 per OSV.
6 March 2012 Page 55 of 60
Bumi Armada 17 October 2011
Financial statements
INCOME STATEMENT (RM m) BALANCE SHEET (RM m)
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Turnover 1,543.9 1,800.7 2,220.6 2,504.3 Net Fixed Assets 4,201.2 5,274.3 6,247.5 6,840.7
Cost of goods sold (883.1) (984.8) (1,226.2) (1,383.6) Invts in Assocs & JVs 151.3 207.6 264.3 332.0
Gross profit 660.8 815.9 994.4 1,120.7 Other LT Assets 423.3 423.3 423.3 423.3
Other operating (exp)/inc. (142.5) (194.1) (248.7) (285.6) Cash & ST Invts 1,248.5 990.5 1,539.2 1,554.1
EBIT 518.3 621.8 745.7 835.2 Other Current Assets 912.0 965.5 1,053.2 1,112.4
Net int (exp)/ Inc (109.2) (113.0) (138.2) (155.7) Total Assets 6,936.2 7,861.3 9,527.5 10,262.5
Associates & JV 26.8 56.3 56.7 67.7
Exceptional gain/ (loss) (27.7) 0.0 0.0 0.0 ST Debt 447.4 447.4 447.4 447.4
Pretax profit 435.9 565.2 664.3 747.2 Other Current Liab 353.1 373.1 405.7 427.8
Tax (70.6) (27.0) (30.8) (34.3) LT Debt 2,559.8 3,000.0 4,000.0 4,000.0
Minority interest (5.7) (6.0) (6.0) (6.0) Other LT Liab 33.2 33.2 33.2 33.2
Net profit 359.7 532.2 627.5 706.9 Shareholders Equity 3,528.0 3,987.0 4,614.5 5,321.4
Net profit ex EI 387.3 532.2 627.5 706.9 Minority Interest 14.7 20.7 26.7 32.7
Total Cap. & Liab 6,936.2 7,861.3 9,527.5 10,262.5
EBITDA 845.1 1,048.7 1,272.6 1,442.0
Sales Growth (%) 24.4 16.6 23.3 12.8 Share capital 2,928.5 2,928.5 2,928.5 2,928.5
EBITDA Growth (%) 18.1 24.1 21.4 13.3 Net Debt 1,758.7 2,456.9 2,908.2 2,893.3
EBIT Growth (%) 10.9 20.0 19.9 12.0 Working capital 1,360.0 1,135.6 1,739.3 1,791.2
Effective Tax Rate (%) 16.2 4.8 4.6 4.6 Gross gearing 85.2 86.5 96.4 83.6
CASH FLOW (RM m) RATES & RATIOS
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Net profit 387.3 532.2 627.5 706.9 Gross Margin (%) 42.8 45.3 44.8 44.8
Dep. & amortization 326.8 426.8 526.8 607.8 EBITDA Margin (%) 54.7 58.2 57.3 57.6
Chg. In working capital (596.6) (33.6) (55.0) (37.1) EBIT Margin (%) 33.6 34.5 33.6 33.3
Other operating CF 212.6 (50.3) (50.7) (61.7) Net Profit Margin (%) 25.1 29.6 28.3 28.2
Operating CF 330.2 875.1 1,048.7 1,215.8 ROAE (%) 17.6 14.2 14.6 14.2
Net capex (1,058.7) (1,500.0) (1,500.0) (1,200.0) ROA (%) 9.3 9.2 9.2 9.1
Chg in LT investment 0.0 0.0 0.0 0.0 ROCE (%) 9.7 10.2 10.2 10.2
Chg in other assets (1,058.7) (1,500.0) (1,500.0) (1,200.0) Div Payout Ratio (%) 17.9 0.0 0.0 0.0
Investment CF (1,167.6) (1,500.0) (1,500.0) (1,200.0) Interest Cover (x) 4.7 5.5 5.4 5.4
Net chg in debt (410.4) 440.2 1,000.0 0.0 Debtors Turn (days) 60.3 70.4 68.6 71.5
Chg in other LT liab. 2,218.5 (73.2) 0.0 0.0 Creditors Turn (days) 90.7 63.1 60.2 63.1
Other financing CF 0.0 0.0 0.0 0.0 Inventory Turn (days) 0.6 0.6 0.6 0.6
Financing cash flow 1,808.1 367.0 1,000.0 0.0 Current Ratio (x) 2.7 2.4 3.0 3.0
Net cash flow 970.7 (258.0) 548.7 15.8 Quick Ratio (x) 2.7 2.4 3.0 3.0
Net Debt/Equity (x) 0.5 0.6 0.6 0.5
Capex to Debt (%) 0.4 0.4 0.3 0.3
N.Cash/(Debt)PS (sen) (60.1) (83.9) (99.3) (98.8)
Opg CFPS (sen) 31.6 31.0 37.7 42.8
Free CFPS (sen) (24.9) (21.3) (15.4) 0.5
Sources: Company, Maybank-IB
6 March 2012 Page 56 of 60
Bumi Armada 17 October 2011
SECTION 4: APPENDICES
6 March 2012 Page 57 of 60
Bumi Armada 17 October 2011
Appendix : Directors & Management
Board of Directors
Name Designation Remarks
Dato‟ Sri Mahamad Fathi l bin
Dato‟ Mahmood
Non-Independent Non
Executive Chairman
Entrepreneurial experience across multiple sectors
Directorships in numerous companies
Diploma, Institute of Management Specialist, fellow, British Institute of
Management, UK
Dato‟ Ahmad Fuad bin Md Ali Non-Independent Non
Executive Deputy
Chairman
Over 20 years experience in finance, accounting auditing & consultancy
Involved in the O&G industry since 2000
ACCA, Member of MICPA, Public Accountant in MIA
Saiful Aznir bin Shahabudin Independent Non
Executive Director
Over 10 years experience in general management, corporate finance &
privatization
CEO of Sharikat Permodalan Kebangsaan Berhad
MBA, Chicago University, BBA, Western Michigan University, USA
Alexandra Elisabeth Johanna
Maria Schaapveld
Independent Non Executive Director
16 years in Corporate Banking and Investment Banking at ABNAMRO Bank
Head of Europe for RBS during 2008
Degree, Politics, Philosophy & Economics , Oxford University, UK and Masters in
Development Economics ,Erasmus University, Netherlands
Andrew Philip Whittle Independent Non Executive Director
40 years of technical and managerial experience in the petroleum exploration
and production industry worldwide focusing on South East Asia/Australia
Member of the American Association of Petroleum Geologists, the Society of
Professional Well Log Analysts and the Petroleum Exploration Society of
Australia
Bachelor of Science, First Class Honours in Geology, University of Adelaide,
Australia
Chan Chee Beng Non-Independent Non
Executive Director
30 years experience in investment banking, financial management and
accounting
Joined Usaha Tegas in 1992, serves as executive director and sits on the Board
of Directors of Usaha Tegas related companies
Degree, Economics & Accounting, Newcastle, ICAEW, UK
Farah Suhanah Ahmad Sarji Non-Independent Non
Executive Director
Legal experience in both the government service and private sector
Managing partner of own law firm since 2003
BA in Law, Kent University, Barrister at Law Middle Temple, UK
Lim Ghee Keong Non-Independent Non
Executive Director
Over 20 years experience in treasury and credit management
Group Treasurer of Usaha Tegas
Degree, Business Administration, Hawaii University, USA
Hassan Assad Basma Chief Executive Officer Over 30 years of experience in the O&G sector, 17 years in Asia
Previously at Kvaerner E&C Singapore & Far East Single Buoy Mooring
B. Sc, Engineering, Manchester Institute of Science & Technology University, UK
Shahrul Rezza Hassan Chief Financial Officer Over 15 years of corporate finance/ fund raising and financial management
experience
Joined Bumi Armada in 2005, was previously with Usaha Tegas
B. Sc, Economics, Bristol University, UK
Source: Company
6 March 2012 Page 58 of 60
Bumi Armada 17 October 2011
Senior Management
Name Designation Remarks
Hassan Assad Basma Chief Executive Officer Over 30 years of experience in the O&G sector, 17 years in Asia
Previously at Kvaerner E&C Singapore & Far East Single Buoy Mooring
Shahrul Rezza Hassan Chief Financial Officer Over 15 years of corporate finance/ fund raising and financial management
experience
Joined Bumi Armada in 2005, was previously with Usaha Tegas
Andrew Day Lamshed Sr. VP, Floating
production systems
Over 25 years of experience in the O&G sector
MBA, Monash Univesity, Bachelor of Engineering, Ballarat College, Australia
Wee Yam Khoon Sr. VP, OSV Co-founder of Bumi Armada Navigation, 33 year veteran of Bumi Armada
One the most experienced Malaysians regarding OSVs
Massimiliano Bellotti, Sr. VP, T&I Over 14 years of experience in O&G management, engineering & construction
M.Sc Aircraft Design, Delft Univesity, Degree in Aircraft Engineering, Pisa
University
Adriaan Petrus Van De Korput Sr. VP, Projects Veteran of Bluewater Offshore Productions Systerms B.V.
M.Sc Management, Brussels Univesity, Bs. Sc Mechanics, Rijswijk, Netherlands
Jonathan Edward Duckett Sr. VP, Corporate
planning
Over 18 years experience in research, planning & strategy
BA, Business Admin, The American College, London
Madhusudanan Madasery Balan Chief Talent Officer Over 22 years of HR experience in O&G and other industries
M. Arts Public Administration, numerous other degrees from India
Noor Azmi bin Abdul Malek VP, BAE Over 20 years experience in engineering
B. Sc, Mechanical Engineering, Colorado State University
Noval D‟avila Paredes VP, Corporate HSEQ Over 16 years experience in HSEQ in Brazil
MBA, Finance, Ibmec, Master in Production Engineering, Rio Federal University
Choong Guan Huat VP, Strategic
Procurement
Over 18 years experience in procurement and project management
Advanced Diploma, Business Admin, UK, Certified Purchasing Manager, USA
Source: Company
6 March 2012 Page 59 of 60
Bumi Armada 17 October 2011
APPENDIX 1
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY Total return is expected to be above 15% in the next 12 months
HOLD Total return is expected to be between -15% to 15% in the next 12 months
SELL Total return is expected to be below -15% in the next 12 months
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
BV = Book Value FV = Fair Value PEG = PE Ratio To Growth
CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio
Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter
CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset
DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share
NTA = Net Tangible Asset ROSF = Return On Shareholders‟ Funds
EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital
EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date
EV = Enterprise Value PBT = Profit Before Tax
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This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation
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ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on
price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Accordingly, investors may
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6 March 2012 Page 60 of 60
Bumi Armada 17 October 2011
APPENDIX 1
Additional Disclaimer (for purpose of distribution in Singapore)
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As of 6 March 2012, KERPL does not have an interest in the said company/companies.
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