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PR Newswire
07-08-2024, 08:57 AM
In the mid 2010s, Bumi Armada performance deteriorated due to the low crude oil prices. It had to re-organized itself and the company's performance over the past few years had improved.
There were improving gross profitability and contribution margins over the past few years. Its facilities are operating at high utilization levels. It had also improved its financial position. But this is a Group whose performance is tied to the expenditure of the oil and gas companies. This in turn is tied to crude oil prices.
Crude oil prices are cyclical and I do not expect the current high prices to continue forever. So when crude prices decline, I would expect Bumi Armada performance to follow suit. If you are a long-term investor, you should be looking at this performance over the cycle rather than just the current performance.
There were improving gross profitability and contribution margins over the past few years. Its facilities are operating at high utilization levels. It had also improved its financial position. But this is a Group whose performance is tied to the expenditure of the oil and gas companies. This in turn is tied to crude oil prices.
Crude oil prices are cyclical and I do not expect the current high prices to continue forever. So when crude prices decline, I would expect Bumi Armada performance to follow suit. If you are a long-term investor, you should be looking at this performance over the cycle rather than just the current performance.