Yinson well positioned to face market uncertainties


YINSON Holdings Bhd is monitoring the effects of the geopolitical conflict between Russia and Ukraine and is well-positioned to face the uncertainties with the implementation of robust risk and internal control management. 

The energy infrastructure and technology provider noted global energy demand has been increasing and outstripping supply, causing strain on the global energy supply chain. 

The company added that even though demand for alternative energy sources such as renewables have surged, the outlook for oil and natural gas remains significantly strong over the longer term. 

This has contributed to a steady rise in oil prices since 2021, which surged exponentially from February 2022 due to the geopolitical conflict between Russia and Ukraine. 

“Although the higher oil price encourages business activities within the oil and gas industry, the conflict is of economic concern. Sanctions on Russia and Belarus are causing further inflation and supply chain bottlenecks in a global economy that is already straining to adjust to the challenges stemming from the Covid-19 pandemic. 

“The group has been following these developments closely and we are well-positioned to face the uncertainties with a robust risk and internal control management in place and the current implementation of robust cost control management,” it said in its Bursa filing yesterday. 

Yinson’s net profit slipped 3% year-on-year (YoY) to RM65 million in its fourth quarter ended Jan 31, 2022 (4Q22), from RM67 million recorded in 4Q21 due to scheduled lower progress in the engineering, procurement, construction, installation and commission (EPCIC) business activities. 

Revenue for the quarter dropped 40.6% YoY to RM741 million from RM1.25 billion in the same period last year. 

For the whole financial year period, net profit totalled RM401 million, up by 27.3% YoY from RM315 million in the financial year 2021 (FY21) due to contribution from its floating production storage and offloading (FPSO) vessel Abigail-Joseph. 

Revenue for the full year fell 25.6% YoY to RM3.61 billion from RM4.85 billion in FY21 due to lower contribution from EPCIC business activities related to the FPSO Anna Nery’s conversion. 

The group proposed a single-tier of two sen per ordinary share for FY22. 

Yinson, in its exchange filing yesterday, noted it will continue to apply measures to prudently manage inflation risk including hedging, effective forecasting, diversification of costs across geographical markets, factoring inflation risk into its contracts and strategic management of its inventories. 

“As an energy infrastructure and technology provider with a solid leadership position in sustainability, management is confident of the group’s ability to stay resilient amidst the rising global economic challenges with its underlying risks. We believe we can achieve satisfactory results for the financial year ending Jan 31, 2023,” it added.