KUCHING: Bumi Armada Bhd (Bumi Armada) suffered a net loss of RM96.71 million in the third quarter of 2016 (3Q16) ended September 2016.
The oil and gas company (O&G) in a filing to Bursa Malaysia yesterday said 3Q16 revenue decreased as compared to 3Q15 ended September 2015.
Bumi Armada in a statement said revenue for 3Q16 declined by 32.5 per cent year-on-year (y-o-y) to RM377.5 million from RM559.5 million registered in 3Q15.
The lower revenue generated was due to 68.2 per cent fall in floating production storage and offloading (FPSO) and floating gas solutions (FGS) revenue on the back of completion of conversion activities on the Eni 1506 and Kraken FPSO projects and reduced contributions from Armada Claire, Armada Perdana and Armada Perkasa vessels.
Nonetheless, revenue from the offshore marine services (OMS) increased by 34.6 per cent y-o-y in 3Q16 due to subsea construction (SC) work related to the LukOil project in the Caspian Sea.
Additionally Bumi Armada’s earnings before interest, tax, depreciation and amortisation (ebitda) in 3Q16 declined to RM91 million as compared to RM298.6 million in 3Q15 as a result of lower contributions across the business units as well as net allowance for doubtful debts of RM79.6 million.
Moreover, the O&G company noted ebitda margin in 3Q16 declined to 24.1 per cent against 53.4 per cent recorded in 3Q15.
Commenting on the 3Q16 financial results, Bumi Armada’s chief executive officer (CEO) and executive director Leon Harland said, “The third quarter of 2016 continued to be challenging as the outlook for global growth, as well as geopolitical uncertainty, continued to undermine oil prices, which in turn limited new activities by oil companies.
“The OMS business revenue improved arising from increased SC activity in the Caspian Sea.
“The offshore support vessels (OSV) segment continues to be challenging, with rates under pressure due to the low demand and over supply of available vessels.
“While we have reported lower revenue from our FPSO and FGS segment in the third quarter of 2016 as projects completed their conversion activities, the positive is that these projects are now moving towards their operational locations.
“The Armada LNG Mediteranna, Armada Olombendo and Armada Kraken have all mobilised for their respective operational locations in Malta, Angola and the North Sea.
“We now enter the hook-up and commissioning stages to bring these new units on-line in 2017, when they will start to generate steady cash flow going forward.
“On a positive note, we have seen an improvement in FPSO project tendering and pre-qualification as oil companies start to look at bringing selected new fields into production.
“While we do not expect award decisions for new projects in the short-term, we remain optimistic on the long-term outlook,” Harland said.