Malaysian floater and vessel contractor Bumi Armada is turning its attention to an improving market outlook after losing its protracted legal battle with Australia’s Woodside Energy.
“We continue to pursue various new projects amid high energy prices and backed by our consistently improving financial position,” Bumi Armada chief executive Gary Christenson said.
The legal dispute related to Woodside’s 2011 charter of Bumi Armada’s Balnaves floating production, storage and offloading unit, for which the Australian operator issued a termination notice in March 2016. Bumi Armada considered this a repudiation of the contract, which entitled it to damages.
That month, Bumi Armada began a writ action in the Supreme Court of Western Australia for a declaration that Woodside was in breach of the contract and seeking damages from the company. In 2020, the court ruled in favour of Woodside on the contractor’s main claim of repudiation of the contract.
Bumi Armada’s subsequent appeal was unsuccessful and then on 10 November the High Court of Australia dismissed an application from the contractor for special leave to appeal part of the appeal judgment and ordered Bumi Armada to pay Woodside’s costs.
“This decision brings this matter to a conclusion,” Bumi Armada confirmed on Thursday.
Bumi Armada posted a net profit of 149.7 million ringgit ($33.59 million) for the third quarter of this year, which was lower than the prior three months due to a downward revision in the estimated residual value of its vessels.
The result was sharply down on the corresponding quarter of 2021, when Bumi Amada posted a net profit of 456.1 million ringgit.
However, Bumi Armada’s operating profit before impairment came in at 276.4 million ringgit, an increase of 14.1% compared with the second quarter because of a continued focus on operational efficiencies, the company said.
Increased revenues of 653.1 million ringgit in the third quarter, up from 517.9 million ringgit in the corresponding period of 2021, were mainly due to progress of completion of the subsea construction work in the Caspian Sea.
Cash generation remained strong with net operating cash flow of 512.2 million ringgit, which enabled it to repay almost $74.8 million of debt during the third quarter.
Bumi Armada has fewer offshore support vessels in its fleet than before, having sold off some during a financial restructuring.
Firm orders as of 30 September remained robust at 13 billion ringgit, with additional optional extensions of up to 9.9 billion ringgit.
“It was pleasing that during the quarter we successfully conducted the planned process shutdowns of two of our vessels in a safe and efficient manner and restarted ahead of plan,” Christenson added.
“The FPO fleet continued to deliver stable operations and we remain focused on safety, sustainability, operational excellence and financial discipline.”
Bumi Armada’s net profit for the nine months ending on 30 September 2022 was 527.1 million ringgit, up from 456.1 million ringgit in the previous year.
The company said it expects its existing business to be stable for the rest of 2022 and it is pursuing new opportunities in targeted markets.
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