Research houses kept BUY calls on Bumi Armada Bhd with target prices of RM0.40, RM0.48 and RM0.43 respectively, as analysts pointed to a weaker set of 1Q26 numbers hit by downtime at the Kraken FPSO but still backed the stock on its long-term contracted cash flows and improving balance sheet.
The quarter came in softer than expected, with analysts from RHB Research and MBSB Research noting that core earnings were dragged down mainly by operational issues at Kraken and lower contributions from the Olombendo FPSO.
Core profit came in at around RM40 million to RM43 million, missing expectations as it accounted for only about 8% to 9% of full-year forecasts.
The main issue was Kraken FPSO, which saw its uptime fall to around 77% during the quarter after equipment-related problems. That led to weaker charter income and pushed revenue down about 11.7% quarter-on-quarter and roughly 35% year-on-year.
The good news, however, is that the issue has already been fixed, with uptime recovering to 100% by March 2026.
Even so, the temporary disruption was enough to leave a clear dent in earnings for the period. Olombendo also contributed less compared with previous quarters, adding to the softness. Analysts noted that while the quarter looked weak, the underlying contracts remain intact and provide a steady base of earnings visibility.
Looking ahead, attention is shifting back to Bumi Armada’s orderbook, which stands at about RM7.5 billion under firm contracts, with additional extension options bringing total visibility closer to RM8.6 billion.
That long-term backlog continues to support expectations of stable cash flow, even if near-term results stay uneven due to operational fluctuations.
RHB Research and MBSB Research trimmed their earnings forecasts following the miss while rolling forward valuation assumptions. HLIB maintained its numbers but still kept a BUY call, pointing to the stock’s undemanding valuation.
As of 10.10 am, the stock price increased by 2.99% to RM0.345.
