RESEARCH HOUSES MAINTAIN "BUY" CALL ON BUMI ARMADA

12 Jul 2013 11:19

KUALA LUMPUR, July 8 (Bernama) -- Two research houses have maintained their "buy" call on oil and gas company Bumi Armada Bhd, whose unit Bumi Armada Caspian LLC has secured projects worth RM568 million from OOO Lukoil-Nizhnevolzhskneft (Lukoil).

The projects are for engineering, procurement, installation and pre-commissioning (EPIC) works.

"We believe the additional EPIC works secured are testament to Bumi Armada's good track record in executing its contracts," RHB Research said in a note today.

The research house said it liked Bumi Armada as the company's prospects were underpinned by improving demand in the global floating production, storage and offloading market (FPSO), steady utilisation of its offshore support vessel business and the company’s plans to offer deepwater services.

RHB Research maintained its "buy" call on Bumi Armada with a target price (TP) of RM4.40.

Meanwhile, in a separate note, Hong Leong Investment Bank also liked the company and set a TP of RM4.88 for the stock.

"The contract is expected to contribute positively to the revenue and earnings for financial year 2013 and thereafter," it said.

Alliance Research, on the other hand, retained its "neutral" call on Bumi Armada with a TP of RM4.43.

It said the news that it secured RM568 million worth of projects was positive, but the real kicker to Bumi Armada's earnings continued to come from the FPSO segment, which is currently very slow on contract flow.

-- BERNAMA

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