COMPANY RESEARCH | Company Update

April 15, 2015

Bumi Armada

(BAB MK)

Share Price: MYR1.06

MCap (USD): 1.7B

Malaysia

Target Price: MYR1.60 (+51%)

ADTV (USD): 4M

Oil & Gas

Wins Malta FSU contract

BUY
Key Data
52w high/low (MYR)

Positive but not unexpected on the win - an 18-year charter
for USD300m, to start ops in 2H16.

Expect to add MYR25m net profit p.a.; 3% of 2017 EPS; NPV
of MYR340m (6 sen/shr).

Issued shares (m)

Maintain BUY with an unchanged MYR1.60 SOP-TP.

Major shareholders:

2.46/1.00

3m avg turnover (USDm)

3.6

Free float (%)

68.1
5,866

Market capitalization

MYR6.2B

-KRISHNAN TATPARANANDAM ANANDA

What’s New
BArmada has bagged a contract from ElectroGas Malta Limited to
convert, supply, operate and maintain a floating storage unit (FSU)
to support a LNG receiving terminal in Delimara, Malta. The
contract is worth about USD300m. The term is for an 18-year + 2
months firm charter period and is due to start in 2H16.

What’s Our View
This job win is positive but not unexpected, for management has
hinted of this. Based on the FSU charter start schedule, conversion
works will take around 12-15 months, to be undertaken at Keppel’s
yard. The capex size for the FSU (USD100m) is small relative to
BArmada’s previous FPSO jobs (from USD400m to >USD1b).
Based on preliminary findings, we estimate this job to offer a 12%
project IRR, MYR25m net profit p.a. and to contribute MYR340m in
NPV (6 sen/shr). This is based on a 6% WACC, 4% interest rate, 18
years depreciation and a 70:30 debt-to equity financing
framework. This job will likely be on a finance lease accounting,
given the length of the contract. Our earnings forecasts are
unchanged pending clarification with management.
Following this job win, we do not expect BArmada to be aggressive
in its pursuit for FPSO tenders this year. It will channel its
resources to executing the projects in hand (FPSO Angola, FPSO
Kraken, FPSO Madura and FSU Malta), which are scheduled for
delivery in 2016-17. In addition, it will pursue its cost
rationalisation exercise. It will likely cut down its work force by
10-15% to lower overheads, in light of the current weak/volatile oil
price. Valuations are inexpensive to long-term growth.
FYE Dec (MYR m)
Revenue
EBITDA
Core net profit
Core EPS (sen)
Core EPS growth (%)
Net DPS (sen)
Core P/E (x)
P/BV (x)
Net dividend yield (%)
ROAE (%)
ROAA (%)
EV/EBITDA (x)
Net debt/equity (%)

(Unchanged)

FY13A
2,073.0
960.7
448.7
15.3
16.2
3.3
6.9
0.7
3.1
11.1
5.7
10.8
72.1

FY14A
2,397.3
1,029.4
399.6
7.9
(48.4)
1.6
13.4
0.8
1.5
7.2
3.4
8.2
43.2

FY15E
2,346.0
1,120.4
426.6
7.1
(10.2)
0.0
14.9
0.9
0.0
6.2
2.6
8.6
46.3

FY16E
2,501.0
1,214.8
487.7
8.1
14.3
0.0
13.1
0.8
0.0
6.7
2.8
8.2
46.8

FY17E
3,695.1
1,659.4
928.4
15.4
90.3
0.0
6.9
0.8
0.0
11.6
5.2
5.4
30.6

SEE PAGE 6 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

17.5%

-Permodalan Nasional Bhd.

8.7%

-Employees Provident Fund

8.0%

Share Price Performance
2.60

110

2.40

100

2.20

90

2.00

80

1.80

70

1.60

60

1.40

50

1.20

40

1.00
Apr-13

Aug-13

Dec-13

Apr-14

Aug-14

Dec-14

30

Bumi Armada - (LHS, MYR)
Bumi Armada / Kuala Lumpur Composite Index - (RHS, %)

1 Mth 3 Mth 12 Mth
Absolute(%)

1.0 (10.9) (56.0)

Relative to index (%)

(2.2) (15.7) (55.8)

Maybank vs Market
Positive
Market Recs

9

Neutral Negative
5

1

Maybank Consensus

% +/-

Target Price (MYR)

1.60

1.45

10.3

'15 PATMI (MYRm)

427

442

(3.5)

'16 PATMI (MYRm)

488

621

(21.5)

Source: FactSet; Maybank

Liaw Thong Jung
(603) 2297 8688
tjliaw@maybank-ib.com
Ivan Yap
(603) 2297 8612
ivan.yap@maybank-ib.com

PP16832/01/2013 (031128)

Maybank KE April 15.0 Mean: 26.1 30.5 . Maybank KE 2 .0 15.0 (x) 3.0 Jul-11 Apr-12 Jan-13 Source: Bloomberg.0 1.5 10.0 2.0 Apr-12 Jan-13 Oct-13 Jul-14 Source: Bloomberg.0 3.5 + 1sd: 30.5 2.0 Jul-11 . 2015 + 1sd: 3.0 25.9 20.Bumi Armada Bumi Armada: 12M forward PER Bumi Armada: 12M forward P/BV (x) 35.0 Oct-13 Jul-14 1.1sd: 21.0 Mean: 2.1sd: 2.

0 553.041.1 309.4 17.356.6 4.451.4) 0.9 6.0 936.088.3 7.1 24.582.7 0.Bumi Armada FYE 31 Dec Key Metrics P/E (reported) (x) Core P/E (x) P/BV (x) P/NTA (x) Net dividend yield (%) FCF yield (%) EV/EBITDA (x) EV/EBIT (x) FY13A FY14A FY15E FY16E FY17E 7.537.0 928.1 592.1 0.429.0 0.9) 2.7 23.6 0.1 0.0 973.0) 0.0) 0.8) (266.459.8 13.674.0 487.817.736.6 1.0 0.0 426.9) 0.8) (5.9 7.050.3 6.303.4 928.7 1.4 474.0 1.8 (400.0) 0.8 0.7 8.029.5) (6.0 7.4) (44.3 5.0 27.7 0. Plant & Equip (net) Intangible assets Investment in Associates & JVs Other assets Total assets ST interest bearing debt Accounts payable LT interest bearing debt Other liabilities Total Liabilities Shareholders Equity Minority Interest Total shareholder equity Total liabilities and equity 634.0 (97.9 0.7 501.9 5.591.9) 48.0 563.2 14.9) 0.0 218.4 14.5 6.8 0.0 0.213.8 0.3 1.4 (187.085.113.6 2.2 (81.8 0.717.671.0 0.6 8.871.882.9) (6.7 244.0 416.0 888.1 933.2 448.4 17.380.9 1.0 266.8 0.0 678.0 889.9 0.6) (81.1 (68.8 8.2 32.120.3 960.187.200.415.0 458.1 0.264.8 689.0 501.0 2.1) 0.214.0 1.451.3 4.9 5.055.2 (84.0) 2.5 8.5) 0.0 (6.0 (51.0 (936.734.9 1.9 (180.0 0.8 CASH FLOW (MYR m) Pretax profit Depreciation & amortisation Adj net interest (income)/exp Change in working capital Cash taxes paid Other operating cash flow Cash flow from operations Capex Free cash flow Dividends paid Equity raised / (purchased) Change in Debt Other invest/financing cash flow Effect of exch rate changes Net cash flow April 15.174.574.0 33.0 635.4 0.3 684.763.5 0.135.0 750.4 4.671.7 9.7 3.563.8 7.6 5.0 545.0) (6.4 BALANCE SHEET (MYR m) Cash & Short Term Investments Accounts receivable Inventory Property.346.623.7 6.0 309.3 7.9) 0.2 6.1 INCOME STATEMENT (MYR m) Revenue Gross profit EBITDA Depreciation Amortisation EBIT Net interest income /(exp) Associates & JV Exceptionals Other pretax income Pretax profit Income tax Minorities Discontinued operations Reported net profit Core net profit 2.1 (61.0 2.2 14.6 1.0 134.1 (1.0 614.9 5.088.0 0.516.2 546.7 3.0 0.7 536.5 14.2 (68.4 9.7 (70.0 10.9 1.1 50.1 1.8 0.8 1.2 704.784.946.5 51.466.018.8 0.8 1.0 10.8 (536.0 0.3 (166.0 8.6 5.5 (1.739.695.7 44.0) 0.1) 680.0 2.8 0.5 8.577.153.9) 1.128.1) 0.0 1.109.9) (3.0 1.0 936.0 431.200.0) 2.6 2.2 0.0 4.579.016.7 2.9 0.185.0 2.2 15.8) 0.8 0.5 563.5 13.4 (546.7) (70.0 (672.8 19.574.738.8) 0.7) 0.3 (118.0 9.4 18.0 1.0 32.0 10.0 405.4 (476.5) 33.0 4.5) 1.668.7 (416.2) 90.4 (99.685.018.574.0) 1.1 0.0 480.1 1.1 56.0 544.6 426.0 (71.7 8.0 38.6 (84.3 8.7 936.1) 0.1 13.1 631.0 281.1 1.016.3 734.0 936.2 8.0 935.1 0.338.623.5 (1.0 2.4 6.7 0.018.809.6 5.953.187.0 (2.1 506.0 (672.0) 52.6 15.0) 0.1 605.4 8.5 447.4 4.2 476.3 408.9) 0.1 1.7 3.0 (392.2) 35.7 487. 2015 3 .1 17.5 (17.9 1.3 0.3 17.8 7.0 0.659.7 7.456.9 0.0 2.0 1.0) 0.574.809.7 1.4 18.0 9.4 271.397.700.7 399.2 1.6 0.4 (506.0 (44.9 480.6) 87.073.9 0.3 (65.9 14.8 (202.8 1.018.9) 0.763.501.1) 0.5) 0.

8 1.7 1.2 3.8 3. Maybank April 15.5 0.5 1.8 2.5 16.2 23.2 2.9 23.7) 86.8 46.4) 4.6) (49.2 (1.3 6.2 Liquidity & Efficiency Cash conversion cycle Days receivable outstanding Days inventory outstanding Days payables outstanding Dividend cover (x) Current ratio (x) 5.2 2.6 5.1 nm 3.0 85.9 37.1 6.3 2.4 0.1 5.3 26.7 2.5 1. 2015 4 .2 nm 2.3 Profitability ratios (%) EBITDA margin EBIT margin Pretax profit margin Payout ratio 46.1 0.8 (1.3 14.5 0.5 1.2 0.7 47.6 64.527.6 8.1 42.8 25.1 11.9 43.2 21.2 (39.9 30.1 0.9) (2.7) 102.4) 88.5 0.3 15.6 6.2 7.0 80.8 11.Bumi Armada FYE 31 Dec Key Ratios Growth ratios (%) Revenue growth EBITDA growth EBIT growth Pretax growth Reported net profit growth Core net profit growth FY13A FY14A FY15E FY16E FY17E 24.7 10.589.1 2.7 2.3 1.1 12.6 1.0 44.6 19.1 95.8 2.5 6.6 3.0 11.7 8.2 2.9 61.142.1 132.9 (42.8 2.4 18.263.1 5.3 90.5 12.0 62.9 5.2 64.9 4.2 1.8 6.9) 106.3 90.1 22.8 26.3 3.5 1.1 27.3 4.1) 8.2 2.7 9.3 nm 2.7 (35.0 48.9 30.0 3.2 148.2 3.7 46.1 Leverage & Expense Analysis Asset/Liability (x) Net debt/equity (%) Net interest cover (x) Debt/EBITDA (x) Capex/revenue (%) Net debt/ (net cash) Source: Company.2 5.6 27.0 72.4 10.6 67.0 48.7 2.0 DuPont analysis Net profit margin (%) Revenue/Assets (x) Assets/Equity (x) ROAE (%) ROAA (%) 20.5 14.3 7.2 51.8 0.1 2.0 3.2 22.5 14.3) (10.4 (40.6 7.2 144.9 1.1 89.3 47.889.7 36.6 5.

com • Automotive TRUONG Thanh Hang (65) 6231 5847 hang.ie@maybank-ke.id • Infra • Construction • Transport• Telcos Mitchell KIM (852) 2268 0634 mitchellkim@kimeng.asman@maybank-ke.co.l@maybank-ke.Regional Luz LORENZO Head of Research (63) 2 849 8836 luz_lorenzo@maybank-atrke. CFA (603) 2297 8690 chiwei. CA Head of Research (603) 2297 8686 wchewh@maybank-ib.marina@maybank-ke.wong@maybank-ib. Head of Retail Research (84) 8 44 555 888 x 8081 tuyen.co.Bumi Armada Research Offices REGIONAL HONG KONG / CHINA INDONESIA WONG Chew Hann.co.sg • Small & Mid Caps • Healthcare Ivan YAP (603) 2297 8612 ivan.com • Property & REITs Derrick HENG.com.sg • SMID Caps – Regional • Technology & Manufacturing • Telcos TAN Chi Wei.com.co.sg • Transport (Land.com.in • Metal & Mining • Capital Goods • Property Vishal MODI (91) 22 6623 2607 vishal@maybank-ke.th • Consumer • Materials • Ind.D@maybank-ke.com • Plantations .anugrah@maybank-ke.hk • Banking & Financials .com.th • Real Estate • Telcos Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 Sittichai.co.vn • Rubber plantation • Tyres and Tubes • Oil&Gas PHAM Nhat Bich (84) 8 44 555 888 x 8083 bich.vn • Oil & Gas NGUYEN Thi Ngan Tuyen.t@maybank-ib.truong@maybank-kimeng.hk • Technology – Regional Lovell SARREAL (63) 2 849 8841 lovell_sarreal@maybank-atrke.com.com. Institutional Research (84) 8 44 555 888 x 8180 trung.t@maybank-ke.com.co.Regional Wilianto IE Head of Research (62) 21 2557 1125 wilianto.th • Transportation • Small cap Chatchai JINDARAT (66) 2658 6300 ext 1401 chatchai.com • Conglomerates • Property • Gaming • Ports/ Logistics Jigar SHAH Head of Research (91) 22 6632 2632 jigar@maybank-ke.sg • Small & Mid Caps Katherine TAN (63) 2 849 8843 kat_tan@maybank-atrke.co.in • Oil & Gas • Automobile • Cement Anubhav GUPTA (91) 22 6623 2605 anubhav@maybank-ke.th LEE Cheng Hooi Regional Chartist (603) 2297 8694 chenghooi.vn • Consumer • Manufacturing • Fishery NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 mi.c@maybank-ke. CFA (86) 21 5096 8370 osberttang@kimeng.c@maybank-ib.aziz@maybank-ib.sg • Commodity • Logistics • S-chips CHAI Li Shin.chng@maybank-ib.Regional • Shipping ONG Chee Ting.le@maybank-kimeng.co.com • Banking & Finance LIAW Thong Jung (603) 2297 8688 tjliaw@maybank-ib.trinh@maybank-kimeng.co.Regional • Petrochem YIN Shao Yang.setiabudi@maybank-ke.com • Conglomerates Jaclyn JIMENEZ (63) 2 849 8842 jaclyn_jimenez@maybank-atrke.com Padon VANNARAT (66) 2658 6300 ext 1450 Padon.co.com.com. CFA (66) 2658 6300 ext 1394 Jesada.iskandar@maybank-ke.hk • Consumer Discretionary & Auto Karen KWAN (852) 2268 0640 karenkwan@kimeng.nguyen@maybank-kimeng.co.com • Banks THAILAND Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 Maria.com.sg • Banking & Finance Gregory YAP (65) 6231 5848 gyap@maybank-ke.com • Mining Michael BENGSON (63) 2 849 8840 michael_bengson@maybank-atrke.in • Consumer SINGAPORE NG Wee Siang Head of Research (65) 6231 5838 ngweesiang@maybank-ke. ACA (603) 2297 8680 desmond.P@maybank-ke.thai@maybank-kimeng.truong@maybank-ke.th JUNIMAN Chief Economist. Deputy Manager.j@maybank-ke.yap@maybank-ib.com.com • Oil & Gas .com.com Tim LEELAHAPHAN Thailand (66) 2658 6300 ext 1420 tim. ACCA Head of Institutional Research (84) 8 44 555 888 x 8181 lien.id • Property Alexander GARTHOFF Institutional Product Manager (852) 2268 0638 alexgarthoff@kimeng.vn • Food & Beverage • Oil&Gas • Banking TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 diep.th • Strategy April 15.u@maybank-ke.co.co.co.id • Cigarette • Healthcare • Retail Osbert TANG.com.com • Strategy • Utilities • Conglomerates • Telcos Warren LAU (852) 2268 0644 warrenlau@kimeng.hk • Oil & Gas .com. CFA (65) 6231 5842 yeakcheekeong@maybank-ke. CFA (852) 2268 0689 rickyng@kimeng.com STRATEGY Sadiq CURRIMBHOY Global Strategist (65) 6231 5836 sadiq@maybank-ke.com.th • Auto • Conmat • Contractor • Steel Jesada TECHAHUSDIN.hk • Utilities & Renewable Energy PHILIPPINES Steven ST CHAN (852) 2268 0645 stevenchan@kimeng.hk • Consumer & Auto Aurellia SETIABUDI (62) 21 2953 0785 aurellia.com.com.com • Consumer Arabelle MAGHIRANG (63) 2 849 8838 arabelle_maghirang@maybank-atrke.p@maybank-ke.T@maybank-ke.com • Gaming – Regional • Media Jacqueline KO.hk • Consumer Staples & Durables Ka Leong LO.id • Plantations Ricky WK NG.co.com.com.tasmin@maybank-ke.co.vn • Technology • Utilities • Construction TRUONG Quang Binh (84) 4 44 555 888 x 8087 binh.t@maybank-ib.Regional Mohshin AZIZ (603) 2297 8692 mohshin. 2015 Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Surachai.co.com • Building Materials • Glove Producers WEI Bin (65) 6231 5844 weibin@maybank-ke.co.com.th • Energy • Petrochem Termporn TANTIVIVAT (66) 2658 6300 ext 1520 termporn.id • Metals & Mining • Cement Pandu ANUGRAH (62) 21 2557 1137 pandu.com Howard WONG Head of Research (852) 2268 0648 howardwong@kimeng.com.co.id • Banking & Finance Benjamin HO (852) 2268 0632 benjaminho@kimeng.nguyen@maybank-kimeng.vn • Strategy • Consumer • Diversified • Utilities THAI Quang Trung.com Luz LORENZO Philippines (63) 2 849 8836 luz_lorenzo@maybank-atrke.hk ECONOMICS Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 suhaimi_ilias@maybank-ib.th • Property Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 jaroonpan.th • Strategy 5 .co. CFA (852) 2268 0633 jacquelineko@kimeng.com • Plantation • Construction & Infrastructure John CHEONG (65) 6231 5845 johncheong@maybank-ke.com • REITs Tee Sze Chiah Head of Retail Research (603) 2297 6858 szechiah.sg Willie CHAN Hong Kong / Regional (852) 2268 0631 williechan@kimeng.w@maybank-ke.p@maybank-ke.com.com • Strategy • Construction & Infrastructure Desmond CH’NG.co.com • Aviation .v@maybank-ke.com.co. CFA (603) 2297 8679 weisum@maybank-ib.k@maybank-ke.y@maybank-ib.hk • Transport & Industrials Adhi TASMIN (62) 21 2557 1209 adhi.ong@maybank-ib.com. CPA (603) 2297 8916 samuel.in • Banking & Financials Abhijeet Kundu (91) 22 6623 2628 Abhijeet@maybank-ke. CFA (852) 2268 0630 kllo@kimeng. CFA.sg • Offshore & Marine WONG Wei Sum. CA (603) 2297 8678 ct.Estates Suttatip PEERASUB (66) 2658 6300 ext 1430 suttatip.hk • Property & REITs Isnaputra ISKANDAR (62) 21 2557 1129 isnaputra. Shipping & Aviation) LEE Yen Ling (603) 2297 8691 lee.vn • Real Estate • Construction • Materials Le Nguyen Nhat Chuyen (84) 8 44 555 888 x 8082 chuyen.com. CFA.th • Electronics VIETNAM LE Hong Lien. CA Regional Head of Institutional Research (603) 2297 8686 wchewh@maybank-ib.com.com • Power • Telcos YEAK Chee Keong.co.yl@maybank-ib.id • Strategy ONG Seng Yeow Regional Head of Retail Research (65) 6432 1453 ongsengyeow@maybank-ke.com Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 mayuree. CFA (65) 6231 5843 derrickheng@maybank-ke.sg Alexander LATZER (852) 2268 0647 alexanderlatzer@kimeng.vn • Port operation • Pharmaceutical • Food & Beverage Kittisorn PRUITIPAT. FRM (66) 2658 6300 ext 1395 Kittisorn.com.com.hk MALAYSIA WONG Chew Hann.th • Media • Commerce Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 sutthichai. BII Indonesia (62) 21 29228888 ext 29682 Juniman@bankbii.com.com • Banks • Construction Ramon ADVIENTO (63) 2 849 8845 ramon_adviento@maybank-atrke.hk • Internet & Telcos Janni ASMAN (62) 21 2953 0784 janni.com • Consumer • Media • Cement INDIA Rommel RODRIGO (63) 2 849 8839 rommel_rodrigo@maybank-atrke.co.th • Services Sector • Transport Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 Sukit.th • Financial Services Kevin WONG (603) 2082 6824 kevin.hk • Metals & Mining – Regional Rahmi MARINA (62) 21 2557 1128 rahmi. CFA (603) 2297 8684 lishin.com.co.L@maybank-ke.lee@maybank-ib.pham@maybank-kimeng.le@maybank-kimeng.

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No. Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirem ents under Paragraph 16. No. MBKET. Reminder Structured securities are complex instruments. financial and political factors (including.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. Philippines: Maybank ATRKES (Reg. Therefore. Investm ent ratings are only applicable to the stocks which form part of the coverage universe. connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. N o.

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