PETALING JAYA: Yinson Holdings Bhd
’s total borrowings jumped 20% in a single quarter to fund project execution, ballooning to RM19.58bil in the second quarter ended July 31, 2024 of financial year 2025 (2Q25).
The debt increase of RM3.3bil as compared to end-April 2024 led to higher finance costs that offset the increase in Yinson’s operating profit.
This dragged down the group’s net profit by 11.7% year-on-year (y-o-y) to RM203mil in 2Q25, lowering earnings per share to 5.6 sen.
To put it into perspective, Yinson’s operating profit in 2Q25 rose by RM131mil or 20.4% y-o-y, while finance costs surged by RM243mil or 120.3% y-o-y.
Yinson builds floating production, storage and offloading (FPSO) vessels for the oil and gas sector. It is noteworthy that Yinson’s revenue also dropped by nearly RM1bil or 31.2% y-o-y to RM2.14bil in 2Q25.
This was due to lower reported progress for its FPSOs under construction. The drop in revenue, however, was offset by a bigger decline in direct expenses.
Yinson declared an interim single-tier dividend of one sen per share for 2Q25, amounting to approximately RM30mil.
Cumulatively, for the first six months of financial year 2025, Yinson’s net profit fell by 7.3% y-o-y to RM406mil against a revenue that also dropped by nearly 29% y-o-y to RM4.36bil. The rise in debt caused Yinson’s net gearing ratio as at end-July 2024 to rise to 1.84 times.
In a filing with Bursa Malaysia, Yinson attributed the higher net gearing ratio to its higher leverage on additional loans and borrowings drawn down to fund project execution needs, which was moderated by the group’s enhanced total equity position of RM8.6bil.
Commenting on its prospects, Yinson said the FPSO market continues to see strong demand.
The demand for FPSOs is positive with the increase in project sanctions around the world particularly from Brazil, being the highest FPSO demand centre, followed by West Africa.
“As FPSOs Atlanta, Maria Quitéria and Agogo commence their charter periods over the next year or two, the group will transition into a phase of stable growth, where it is poised to receive steady, contracted income streams for the next few decades.
“The strong focus on deliveries will also mean giving big investments a break until these deliverables are met and the start of the cash flows are seen. With our focus on delivery and sustainability, we believe that we can weather the ups and downs of the energy market while delivering sustained value to our stakeholders.
“Supported by our existing portfolio of long-term contracts, we believe we can achieve satisfactory results for the financial year ending Jan 31, 2025,” it stated.
