Yinson’s 3Q earnings rise on lower administrative expenses

By SHAZNI ONG / Pic By TMR File

YINSON HOLDINGS Bhd‘s floating, production, storing and offloading (FPSO) vessels business continues to be profitable with earnings rising 24.36% year-on year (YoY) to RM53.97 million in the third quarter ended Oct 31, 2019 (3Q19), supported by lower administrative expenses and higher profit from operations.

The profit rose YoY despite revenue for the quarter falling 9.27% YoY to RM240.97 million, the company’s exchange filing yesterday stated.

For the cumulative nine months, Yinson’s net profit dropped 18.39% YoY to RM144.96 million due to lower revenue following the Allan FPSO charter cessation at the end of last financial year, net unfavorable foreign-exchange movement of RM36.66 million and impairment loss on trade and other receivables of RM2.25 million and higher financing cost of RM6.71 million.

The fall in earnings is partially set-off by lower impairment loss on property, plant and equipment of RM66.91 million, lower fair value loss on investment properties of RM1.8 million, higher interest income earned of RM8.88 million and lower tax expenses of RM4.97 million.

Revenue for the total nine months period was down 11.23% YoY at RM663.4 million.

On prospects going forward, Yinson noted that the energy industry remains challenging with the emergence of new alternative energy resources and financial institutions risk appetite towards the sector.

“The global economy is exposed to the risk of increased trade protectionism, geopolitical conditions uncertainty, with higher downside risks.

“Monetary policy uncertainties in major economies and unsettled global trade disputes will result in prolonged negative effect on the world economy,” it said.

Yinson remains optimistic that its outlook reflected in part by its recent successful bid in Brazil for the FPSO Marlim 2 project and other potential upcoming projects in the pipeline.

The group shall strive to achieve satisfactory results for the financial year ending Jan 31, 2020, it said.

Its latest FPSO vessel, FPSO Helang, has completed performance testing and charter rates commenced on Dec 6, 2019.

Yinson said its team achieved timely delivery of first oil production 19 months after signing the contract for delivery of the FPSO facility with client JX Nippon Oil & Gas Exploration (M) Ltd.

FPSO Helang is operating in Block SK10, offshore Miri, Sarawak, and is the group’s maiden entry into the Malaysian offshore oil and gas market.

Yinson group chairman Lim Han Weng said the achievement was made possible through the great teamwork between the Yinson team, client and subcontractors.

“I would like to thank JX Nippon and Petroliam Nasional Bhd for the opportunity to undertake this project. This is a special project for us as it marks the very first project in Malaysia for Yinson. We are looking forward to contributing to Malaysia’s energy mix,” he said.

Yinson Energy CEO Datuk Mohamed Sabri Zain said the team achieved zero lost-time injuries throughout the 6.03 million manhours clocked during the conversion and commissioning of FPSO Helang.

“We are proud to be able to demonstrate Yinson’s expertise and commitment to safety throughout this project.

“Our operations team, based in Miri has taken over the day-to-day operations of FPSO Helang and I have every confidence that we will continue to maintain our strong average fleet uptime record across the group,” he said.

Yinson shares closed unchanged at RM6.44 yesterday, giving it a market capitalisation of RM6.92 billion.