KUALA LUMPUR: Offshore energy services and facilities provider Bumi Armada Berhad's share price hit a low of 47 sen, or fell almost 26 per cent in early trade today.
This is after Bumi Armada announced that it is likely to take a hit to revenue after a top performing floating production system (FPSO), the Armada Kraken FPSO, stopped production due to a technical issue.
Bumi Armada's share price was trading at 51 sen with more than 124 million shares changing hands.
Bursa Malaysia has suspended short selling of Bumi Armada shares for the rest of the day under proprietary day trading (PDT) and intraday short selling (IDSS) after its stock fell more than 15 sen, or 15 per cent, from the reference price.
The oilfield services company's shares and structured warrants will not be available for trading until the following trading day, June 7, at 8.30 a.m.
In a note issued today, Hong Leong Investment Bank (HLIB) said that the Armada Kraken FPSO has a daily charter rate of roughly US$480,000 per day (US$175 million per year), accounting for about 35 per cent of the group's income contribution in fiscal year 2022 (FY2022).
The investment bank said that it is negative about this development.
"While we acknowledge we do not have clarity on Kraken's shut-in timeline yet, we decide to make an arbitrary estimate of a six-month downtime for the said FPSO," it said.
HLIB reduced its financial year (FY) 2023 net profit forecast on Bumi Armada by 38 per cent while leaving FY 2024–2025 earnings estimates unchanged.
It also downgraded the company to a 'Sell' call with a lower target price (TP) of 54 sen.