Yinson expects strong results ahead

by **Cals** Fri 28 Mar 2014, 11:55

Business & Markets 2014

Written by Shalini Kumar of theedgemalaysia.com

Friday, 28 March 2014 09:12

KUALA LUMPUR: Yinson Holdings Bhd expects its operational results for the next financial year to be substantially better than the year ended Jan 31, 2014, (FY14) taking into account the full-year contribution from its oil production unit, Yinson Production AS (formerly known as Fred Olsen Production ASA) that was acquired end of last year for RM576 million cash.

In a Bursa Malaysia filing yesterday, the company said the better results expected for FY15 would also be driven by new contracts, with “the coming onstream of floating production, storage and offloading (FPSO) operations in the second half of FY15”.

For the fourth quarter ended Jan 31, 2014 Yinson posted a net profit of RM26.33 million, a significant 444% increase from the RM4.83 million registered in the previous corresponding period. Revenue increased to RM253.47 million, from RM172.74 million previously.

“The increase in the bottom line for the quarter under review was largely due to earnings contribution from the floating storage and offloading (FSO) vessel, PTSC Bien Dong 01, which commenced operations in 3QFY14 and also from the group’s subsidiary, Yinson Production AS (YPAS),” it said in the filing.

For the full year, the company posted a 99% increase in net profit to RM67.49 million from RM33.88 million the year before. Revenue increased 9.3% to RM945.89 million from RM865.22 million.

Consensus estimates put Yinson’s FY15 net profit at about RM125 million, reflecting the full-year earnings of its three FPSO vessels held under YPAS that are operating in West Africa and the six-month earnings of another FPSO vessel to be deployed in the Vietnam waters in a few more months.

The first oil from the Vietnam bound FPSO vessel, PTSC Lam Son, is scheduled for the second half of this year. With this latest FPSO vessel — co-owned by Yinson and Vietnam’s national oil company, PetroVietnam, Yinson is now the 6th largest FPSO operator globally with four such vessels. Yinson wholly owns another three FPSO vessels through YPAS.

Group executive chairman Lim Han Weng said Yinson was on track to maintaining its growth trajectory going forward, and capitalise on future opportunities in the oil and gas industry.

Yinson had earlier announced its proposal for a renounceable rights issue of new ordinary shares of RM1 per share par value to raise proceeds of up to RM600 million.

The proceeds raised from the proposed exercise will be used to pare down the group’s financial borrowings and for the undertaking of new jobs.

This article first appeared in The Edge Financial Daily, on March 28, 2014.