By S BIRRUNTHA / Graphic By TMR

Bumi Armada Bhd’s net profit rose 28.5% to RM62.2 million in the first quarter ended March 31, 2019 (1Q19), compared to RM48.4 million in the same quarter a year ago due to impairments provided previously and lower tax expenses.

The company said it had recognised impairment losses for its assets including on the Armada Kraken floating production storage and offloading (FPSO) and certain offshore support vessel (OSVs) during the financial year ended Dec 31, 2018.

The higher profit was also helped by lower tax expenses due to recognition of deferred tax assets and lower management fees recognised this financial year.

However, Bumi Armada’s quarterly revenue fell 18.1% to RM491.6 million from RM600.3 million in the previous year’s corresponding quarter, mainly due to the completion of the Lukoil project in the Caspian Sea in December 2018.

Earnings per share at the oil and gas company improved to 1.06 sen from 0.83 sen recorded last year.

The Malaysia-based international offshore oilfield services provider reported lower revenue of RM425.6 million from the floating production and operation (FPO) segment due to decreased revenue from Armada TGT FPSO following the signing of the extension agreement in August 2018.

The company also announced a lower revenue of RM66 million due to Armada Installer and Armada Constructor completing their contracts at the end of 2018.

The OSV segment was unchanged in 1Q19. Fleet utilisation remained below 40%.

Bumi Armada said it plans to focus on maintaining health safety security environment and quality, reducing costs and debts, improving Armada Kraken performance, monetising unutilised assets, securing charters for the offshore marine services vessels and selective growth in the FPO sector.

Bumi Armada CEO Gary Christenson said the company is looking to stabilise its financial performance through various efficiency and performance improvement initiatives.

“Our focus will be on improving our performance on Armada Kraken, selectively pursuing new FPO projects and strengthening the balance sheet to support growth going forward.

“Since the close of 1Q19, the refinancing of our corporate debt has now been completed and we will monetise under-utilised assets to accelerate debt reduction,” he said in a statement.

Christenson added that the company also announced a new FPSO project for Oil and Natural Gas Corp’s Kakinada 98-2 oilfield with their Indian joint-venture company.