Broker Name: Maybank Investment Bank Berhad
Date of Report: March 13, 2026
Excerpt from Maybank Investment Bank Berhad report.
Report Summary
- Bumi Armada (BAB MK) is diversifying beyond its traditional FPSO leasing business by venturing into upstream oil and gas exploration in Indonesia, targeting the Akia and Kojo blocks. These projects are still in early exploration phases and, if successful, could only start contributing after 2030.
- The company’s earnings are expected to decline in FY26-27 due to a lower USD/MYR forex assumption and the potential expiry of the TGT1 FPSO contract. However, contract extensions and a successful bid for the FPSO Tangkulo project could offer upside risk and serve as key catalysts for a re-rating.
- Bumi Armada’s balance sheet has improved significantly, with net debt reduced for 23 consecutive quarters, allowing for stable dividends and increased financial flexibility.
- The company’s valuation and price target were trimmed due to currency adjustments and updated net debt figures. The share price is currently held, pending new job wins or successful exploration outcomes.
- Key risks include oil price volatility, unplanned asset shutdowns, cost overruns, and execution challenges. Upside potential comes from new FPSO contracts or sizeable resource finds at Akia/Kojo.
Above is an excerpt from a report by Maybank Investment Bank Berhad. Clients of Maybank Investment Bank Berhad can be the first to access the full report from the Maybank website: www.maybank.com/investment-banking
