Bumi Armada (BAB) is welcoming a new CEO, Leon A. Harland, to spearhead the organisation. Macquarie Equities Research (MER) believes Harland’s extensive experience in various major oil & gas companies will be beneficial to BAB. Read on to find out more …
 
Event

• BAB has appointed Leon A. Harland as its new CEO and Executive Director effective on 16 May 2016. Meanwhile, its Acting CEO, Chan Chee Beng was redesignated as Non Independent and Non Executive Director, a position he held prior to his appointment as Acting CEO in January 2015.

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Impact

• MER believes Harland has the relevant experience to lead BAB, in view of his work experience in SBM Offshore, one of the world's largest floating production, storage and offloading (FPSO) operator and Heemera Marine Contractors, a global marine contractor in the offshore oil & gas industry.

• Prior to joining BAB, Harland was the Executive Vice-President, Commercial & Technology of Heerema Marine Contractors and a member of the Board of Management (2013 - present). He started his career as an offshore engineer at Shell Research (1994-1998) before joining SBM Offshore in 1998 as Concept Lead Engineer.

• In SBM, he was tasked to start up and build SBM's floating-LNG business in 2004. He has held various position in SBM Offshore, including the role as Director of FLNG Business in 2008-2011, prior to his departure to Heemera.

• To recap, BAB's ex-CEO, Hassan Assad Basma resigned in December 2014 for family reasons. The Acting CEO, Chan has stepped up and led the group through difficult time focusing on business optimisation and cost savings.‌

• As BAB's business enters its recovery phase, MER believes the appointment of Harland it timely. His experience will be valuable for BAB to develop its growth strategy.

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Action and recommendation

• Maintain Outperform. Timely delivery of three new FPSOs by end-2016 will likely re-rate its share price from the current level of 12x 2017E PE (-2 standard deviation).

Source: Macquarie Research - 30 Mar 2016