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Is the Market Sleeping on Bumi Armada’s Turnaround?
Over the past six years, Bumi Armada has transitioned from a dual-segment model - comprising FPSO operations and Offshore Marine Services - into a focused, integrated offshore production business.
The offshore support vessel segment was gradually scaled down, and by 2022, all operational assets were consolidated under a single Operations unit. A new Technology, Engineering & Projects unit was also established to provide engineering consultancy and project support services.
Geographically, Bumi Armada streamlined its footprint while maintaining a presence in key offshore regions across Asia, Africa, and Europe. By 2023, its operations spanned five continents, but with fewer, more strategically aligned assets focused on high-value, long-term production contracts.
These strategic shifts have yielded strong results. Net profit surged from RM 38 million in 2019 to RM 656 million in 2024, while ROE improved from 1.2% to 11.3%. This improvement is reflected in its Goldmine quadrant in the Fundamental Mapper.
Can this performance be sustained amid declining crude oil prices triggered by the current tariff war?
According to the company, its core revenue is not directly tied to crude oil prices. This is due to its long-term, fixed-rate FPSO contracts, which provide stable cash flows regardless of short-term oil price movements.
While broader market conditions - such as lower crude prices - may affect future contract opportunities or investment cycles, Bumi Armada’s current revenue base remains largely insulated from these fluctuations.
Has the market missed this picture, given the declining stock price since the start of the year?
If you want to understand more about the impact of declining crude oil prices on other Bursa E&P companies, join me this at this Thursday podcast