Yinson 1Q profit falls on lower offshore revenue

By MARK RAO / Graphic By TMR

Yinson Holdings Bhd noted impairment and foreign exchange losses and lower revenue from its core business saw it earnings fall 17.5% year-on-year (YoY) to RM49.85 million.

For its first quarter ended April 30 this year, the floating, production, storage and offloading (FPSO) service provider stated in an exchange filing yesterday, revenue fell 11.1% YoY to RM209 million on lower contribution from its offshore and marine business which was negatively impacted by the cessation of the FPSO Allan charter at the Gabon-based Olowi field.

Earnings were also weighed down by higher impairment loss on trade and other receivables and a net unfavourable forex movements.

This was offset by lower depreciation and amortisation of assets.

Yinson added the long-term industry outlook is challenging due to the emergence of new alternative energy resources and low risk appetite among lenders.

Rising trade protectionism, geopolitical risk and uncertainties over monetary policy in major economies are further creating a challenging external picture for the industry, it added.

Despite these challenges, the company remains optimistic in replenishing its order book for offshore and marine work.

“Management is optimistic the industry will replenish its production capacity with new FPSO awards in current financial year to counter the lagging investment effect from the past years,” it said.

Amid the challenging global economic environment and the volatility of other currencies against the US dollar, the group will strive to achieve satisfactory results for the next financial year ending Jan 31, 2020, its filing stated.