Yinson’s 2Q net profit up 13.5% to RM143m

The growth is attributed to contribution effect of EPICC biz activities and FPSO operations

by S BIRRUNTHA / Pic source from www.yinson.com

YINSON Holdings Bhd’s net profit increased by 13.5% to RM143 million in the second quarter ended July 31, 2022 (2Q22), from RM126 million recorded a year ago.

The global energy infrastructure and technology group said the increase was mainly due to the contribution effect of the engineering, procurement, construction, installation and commissioning (EPCIC) business activities and floating production storage and offloading (FPSO) operations.

However, it noted that these were partially offset by higher operational overheads and financing costs in the current financial period.

Revenue for the quarter jumped 53.7% to RM1.62 billion from RM1.05 billion, underpinned by the commencement of EPCIC business activities for FPSO Maria Quitéria and FPSO Atlanta and a higher contribution from FPSO operations in the current financial period.

Yinson also added that the EPCIC business activities for FPSO Maria Quitéria and FPSO Atlanta commenced after the execution of the firm contracts with Petrobras on Feb 7, 2022, and with Enauta Energia SA on Feb 21, 2022, respectively.

For the six months, Yinson’s net profit rose 10.5% to RM263 million from RM238 million, while revenue increased 28.3% to RM2.63 billion from RM2.05 billion previously.

Yinson has also declared an interim single-tier dividend of one sen per share for the financial year ending Jan 31, 2023, amounting to approximately RM29 million.

The group will pay the dividend on Dec 16, 2022.

Commenting on the financial performance, group executive chairman Lim Han Weng said Yinson continues to chart a strong financial performance contributed by the smooth progress of assets under construction and reliable operations.

“The consistency of Yinson’s performance throughout the volatility of recent years is a testament to our sound business model and ability to adapt to change.  

“Our many activities on the FPSO front reflect the industry’s healthy recovery post-pandemic.

“As a minimal pool of FPSO specialists in the market, we are well positioned to consider the various opportunities that have opened up as projects are revived,” he said in a statement yesterday.

Lim also noted that Yinson Renewables (YR) continues to grow its global presence and project pipeline, most recently making its entry into Indonesia through the acquisition of Indonesia-incorporated turnkey solar company PT Ineco Solar Solutions.

Ineco Solar is a well-established solar system provider in Indonesia with a track record delivering residential and commercial rooftop solar systems across Bali, Gili, East Java and West Nusa Tenggara.

“One of YR’s key strategies is working with capable local partners with on-the-ground knowledge of local conditions.

“Our strategy with Ineco Solar is to grow in the commercial and industrial rooftop photovoltaic system segment, as an entry into a growing renewables market with huge potential as the market develops.

“Globally, through the efforts of the YR team and our local partners, we have grown our renewables pipeline to over five gigawatts (GW), including over 3.5GW of early-stage projects and another 1.5GW for which planning consent is in process,” he added.

Lim also highlighted that Yinson has been building its foundations in sustainability for many years, and the group is encouraged to see its investment in the energy transition bearing fruit, as seen by the synergistic growth of its offshore production, renewables and green technologies divisions.  

He said as the world continues to transition to a low carbon economy and as environmental, social, and governance considerations drive investment decisions everywhere, Yinson believes that its leadership position in the sustainability space will allow the group to remain resilient and adaptable.

Yinson’s share price closed four sen or 1.77% higher to RM2.30 yesterday, giving it a market capitalisation of RM7.02 billion.

On the rating front, Kenanga Research has maintained its ‘Outperform’ call on Yinson at RM2.30 with a higher target price of RM3.15.