Yesterday, Bumi Armada Berhad (Bumi Armada) announced that its jointly-controlled entity, Forbes Bumi Armada Offshore Limited (Forbes), has signed a floating production, storage and offloading (FPSO) contract with Oil and Natural Gas Corporation Ltd (ONGC) following the letter of award secured on 25 June 2011 from ONGC. The contract is for an FPSO to be operated by Forbes on the ONGC D1 field located 200km off the west coast of Mumbai, India. This contract is for a 7-year fixed term time charter, plus another 6-year annual extension at ONGC’s discretion.
Downgrading to Neutral. Given that the share price of Bumi Armada has performed very well since its listing despite the recent global market retracement, we are downgrading our call to Neutral, with an unchanged fair value of RM3.65, based on sum-of-parts valuation, which is also equivalent to a blended PER of 18x FY12.
Downgrading to Neutral. Given that the share price of Bumi Armada has performed very well since its listing despite the recent global market retracement, we are downgrading our call to Neutral, with an unchanged fair value of RM3.65, based on sum-of-parts valuation, which is also equivalent to a blended PER of 18x FY12.
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