KUALA LUMPUR: Maybank Investment Bank (Maybank IB) research has raised its full year 2023 (FY23) net profit forecast for Bumi Armada Bhd by 21 per cent fuelled by the higher-than-anticipated uptime of the Kraken Floating Production, Storage, and Offloading (FPSO) vessel for the year, while leaving FY24-25E estimates relatively unchanged.
"With its Kraken FPSO now fully up and running at pre-shutdown levels, we believe that the worst is now behind the group."We should see full quarterly earnings recovery in the fourth quarter (4Q23) and we are expecting full status quo in FY24E," said the research firm in a note today.
Maybank IB said the quarter-over-quarter (QoQ) strength was mainly due to the recovery in Kraken's daily charter rate as the FPSO achieved 90 per cent pre-shutdown production on July 20 2023 and 100 per cent production on August 7 2023.
With that, the research firm expects a record-high core net profit of RM853 million in 2024, a big 31 per cent jump from the previous year.
"Given these positive factors, Bumi Armada emerges as the preferred choice in our sector," said the research firm.
Post-revision of its earnings estimate, Maybank IB maintains a buy call and raised its target price on Bumi Armada slightly to 71 sen from 70 sen previously.
"We foresee Bumi Armada's balance sheet to continue improving over the next few quarters with its strong operating cash flows to reduce its finance costs to make room for debt financing for its other ventures in the near future," it said.-ends-
