Bumi Armada Bhd remains a BUY for both MBSB Research and HLIB, although both brokerages have cut their target prices following weaker-than-expected earnings. MBSB Research lowered its target to RM0.42 from RM0.48 while HLIB cut its target to RM0.38 from RM0.43, citing weaker contributions from the Armada Kraken and Armada Olombendo FPSOs.
MBSB Research said Bumi Armada’s 6MFY26 normalised earnings came in at only 28% of its forecast and 34% of consensus expectations. Revenue fell 27% year-on-year to RM642 million, mainly due to lower charter rates for Armada Kraken, reduced finance lease income from Armada Olombendo and the absence of a distribution from the former charterer of Armada Perdana recorded in the previous year.
Despite this, 6MFY26 core earnings rose 34% year-on-year to RM104 million, with 2QFY26 core earnings increasing 67% quarter-on-quarter to RM65 million.
HLIB said 2QFY26 core net profit rose 53.2% quarter-on-quarter but fell 32.6% year-on-year to RM66.3 million, taking first-half core earnings to RM109.6 million, below expectations.
Still, both research houses highlighted Bumi Armada’s RM7.1 billion firm vessel orderbook as providing medium-term earnings visibility. MBSB Research also sees potential upside from the Jalu PSC, where farm-out discussions could reduce capital commitments and development risks.
MBSB Research expects potential share buybacks in 2HFY26 following regulatory clearance, which could reduce the share count by up to 10% and lift earnings per share by around 9% to 11%.
As of 3.02 pm, the stock price dropped 2.86% to RM0.34.
