Bumi Q2 earnings decline Energy
Bumi Q2 earnings decline
Malaysian FPSO player Bumi Armada reported 12.2% lower revenue of RM402.9 million and net loss of RM518.3 million in Q2 2016 due to lower income from its floating production storage and offloading (FPSO), and floating gas solutions (FGS) business units.
The company said FPSO and FGS earnings fell 28.1% as a result of lower revenue contribution from Armada Claire and Armada Perkasa.
Bumi’s offshore marine services unit, however, saw 15.4% income increase due to improved utilization of offshore support vessels (OSV), and subsea construction work related to the Lukoil project in the Caspian Sea.
“Bumi Armada has been impacted by the loss of earnings from Armada Claire, challenges to get regular payments from our FPSO clients in Nigeria and continued weak demand for OSV services,” said Leon Harland, CEO of Bumi.
“In addition, we have taken non-cash impairments, predominantly on the Armada Claire, which pushed the results to a net loss. This non-cash impairment does not in any way change our position that the termination of the contract was unlawful and we will continue to pursue our claim for damages for this unlawful termination.”
In April 2016, Bumi swung the legal axe on Woodside Energy, claiming more than US$283.5 million, after the Australian company cancelled the Armada Claire FPSO deal in March. It’s seeking damages in Australia’s Supreme Court for a sum of $276 million, plus $7.7 million for work that had been done and materials supplied for the contract.
Commenting on new businesses, Harland said the group is well advanced in the completion of four new FPSO and FGS projects, which once operational will provide a step-change in financial results from 2017 onwards. He said in the OSV business while there was a slight increase in fleet utilization in Q2 2016, the firm does not expect to see a major improvement in the segment over the short-term.