Commenting on the results, chief executive officer Leon Harland said:
KUALA LUMPUR: Bumi Armada Bhd
, whose shares hit fresh lows late last week, could due to an internal memo about its efforts to reduce cash flow and limit efforts to pursue new work.
However, at midday on Monday, shares of the international offshore energy facilities and services provider, managed to stage a mild rebound.
At noon, it was up two sen to 18 sen. It was actively traded with 147.51 million shares done.
Last Friday, its share price fell to an all-time low of 16 sen which could be linked to an internal memo on Nov 27.
The selldown caused Bursa Malaysia Securities to query the company about the unusual market activity (UMA) on Friday.
In its reply to the UMA at midday on Monday, Bumi Armada said its chief executive officer (CEO) had issued an internal memo to the employees, among other things, that “despite the company’s concerted efforts to fundamentally improve the company’s financial situation, the company has not made substantial progress with the financial parties involved resulting in the company being forced to drastically reduce the company’s cash outflow and limit the company’s efforts to pursue new work”.
Bumi Armada clarified the statement was meant to highlight to the employees the challenging market and financial circumstances faced by the oil and gas sector.
Hence, the group had to be highly selective in the projects which it is pursuing while discussions with financial parties are ongoing.
Bumi Armada also told Bursa Securities that in its third quarterly report for the period ended Sept 30, 2018 that it was focusing on strengthening its overall balance sheet and was working with lenders to put in place a refinancing of the group’s US$500mil debt.
“The company wishes to further clarify that it is currently in active negotiations with the financiers, and target to complete the refinancing by the end of the first quarter of 2019,” it said.
On Nov 23, it announced that it had posted net losses of RM502.82mil in the third quarter ende Sept 30, 2018 due to non-cash impairments totaling RM563.5mil.
Bumi Armada said it would have made a net profit of RM75.2mil if not for the non-cash impairments of RM41.4mil for the floating production and production (FPO) and RM522.1mil for the offshore mairne services (OMS) businesses.
The non-cash impairments saw it posted the net loss of RM502.82mil compared with a net profit of RM123.73mil a year ago.
Bumi Armada's revenue fell by 8.3% to RM588.04mil from RM641.39mil a year ago. Loss per share was 8.56 sen compared with earnings per share of 2.11 sen.
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