RHB Research said the monetisation of the FPSO projects is still ongoing.
PETALING JAYA: Yinson Holdings Bhd
’s earnings are expected to pick up in the second half of its financial year 2025 (2H25) led by maiden earnings contributions from the floating production, storage, offloading (FPSO) vessels Maria Quitéria and Atlanta.
For the second quarter of FY25 (2Q25), the group’s core net profit fell by 23.2% year-on-year (y-o-y) to RM172mil, bringing core net profit for 1H25 down by 11.8% y-o-y to RM382mil, due to lower engineering, procurement, construction, installation and commissioning (EPCIC) earnings contributions and higher finance costs.
CIMB Research said Yinson’s first half core net profit missed expectations at 50% of its FY25 forecast (consensus: 53%), as the research house sees a 10% half-on-half decline in 2H due to a further decline in EPCIC earnings.
“The weaker 2Q25 performance was mainly driven by a sharp decline in revenue from the EPCIC segment (down 72.7% y-o-y) as the construction of the FPSOs Maria Quiteria and Atlanta is expected to be completed by the end of FY25.
“Despite this, earnings before interest, taxes, depreciation, and amortisation increased 19.5% y-o-y, supported by higher revenue from the production segment, primarily due to contributions from the FPSO Anna Nery, following its first oil on May 7, 2023,” the research house said in a report yesterday.
It added that as of 2Q25, construction progress for Maria Quitéria and Atlanta reached 96% and 88% completion, respectively, while another FPSO vessel, Agogo, advanced to 75%.
“First oil for Maria Quiteria and Atlanta is scheduled for the end of this year, with the former moved slightly from the initial 3Q target. Meanwhile, Agogo is on track to achieve first oil by 4Q next year,” CIMB Research said.
The research house maintained a “buy” call on Yinson with a target price of RM3.16.
It projected core earnings per share (EPS) to decline by 23.1% and 5.5% y-o-y in FY25 and FY26, as EPCIC earnings from Maria Quiteria and Atlanta taper off and phase out entirely by FY26.
“In FY27, we see core EPS jumping 38% y-o-y due to the full-year earnings contribution from Agogo,” the research house said.
Meanwhile, RHB Research and Kenanga Research said Yinson’s 1H25 earnings came in within their expectations.
RHB Research said it had stripped off RM155mil in EPCIC earnings (inclusive of a RM160mil EPCC-related finance cost that is being classified under corporate debt), as well as a RM35mil fund investment impairment reversal, to arrive at a core profit figure of RM230mil for 1H25.
“We expect FPSO earnings to pick up in 4Q25, driven by the maiden earnings contribution from Maria Quitéria and Atlanta.
“Global FPSO demand remains robust and Yinson is still actively bidding for new projects. As it is currently a vendor’s market, the group will increase its new project take-up, with two new jobs in two years,” the research house said.
RHB Research said the monetisation of the FPSO projects is still ongoing, which should allow the group to fund new projects without resorting to fundraising.
Kenanga Research said it continues to favour Yinson for its strong FPSO order book with multiple major FPSO jobs at the conversion stage, which provides significant earnings growth in coming years.
RHB Research and Kenanga Research maintained “buy” and “outperform” calls on Yinson with target prices of RM3.29 and RM3.55, respectively.
