Monday, November 21, 2011

CIMB Research maintains Outperform rating on Bumi Armada

KUALA LUMPUR (Nov 21): CIMB Research has maintained its Outperform rating on Bumi Armada Bhd at RM3.94 with a target price of RM4.61, and said that the company's third quarter results released on Monday did not disappoint the research house though it undershot market expectations.

Bumi Armada's net profit for the third quarter ended Sept 30, 2011 fell 7.5% to RM92.58 million from RM100.08 million a year, due mainly to its listing expenses in July this year.

The company said on Monday that revenue for the quarter rose to RM403.92 million from RM328.9 million in 2010.

For the nine months ended Sept 30, Bumi Armada's net profit slipped to RM234.91 million from RM240.38 million in 2010, while revenue jumped to RM1.17 billion from RM870.22 million.

CIMB Research said on Monday that although Bumi Armada's nine month-net profit made up 62% of its forecast, the research house considered it to be in line as it expects a much stronger 4Q and a record finish for FY11, thanks to the Apache and ONGC contracts.

'We continue to value Bumi at 17.6x CY13 P/E, a 40% premium over our CY13 target market P/E. Bumi remains an Outperform due to new FPSO contracts and marginal field works.

'It is now a component of the MSCI Malaysia Index,' said the research house.

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