PETALING JAYA: The worst is likely over for Yinson Holdings Bhd
, with more floating production storage and offloading (FPSO) vessels progressing to the operational phase.
In October, Yinson’s FPSO Maria Quiteria achieved first oil, while FPSO Atlanta is expected to rake in maiden charter rates by end-December 2024 after achieving first oil.
FPSO Enauta is also expected to achieve first oil in the fourth quarter of financial year 2025 (4Q25), with a completion rate of 98% in the reported quarter.
FPSO Agogo’s completion rate stood at 80% as at end-October 2024 – ahead of schedule – and is expected to achieve first oil in 4Q26.
“Profits wise, we think that the worst is over. It is just a timing issue. Yinson is slowly moving away from its huge capital expenditure (capex) cycle and this is a re-rating catalyst as Yinson would de-risk itself from construction, cost-overrun and delivery risks,” said Maybank Investment Bank Research.
The research house noted that the FPSO market is currently in the “Golden Age” due to a robust global tender pipeline – with an expected 13 awards over the next 12 months.
“Yinson may be looking for at least one new job in the financial year 2026 (FY26) in the mid-sized segment (50 to 200 thousand barrels of oil equivalent per day) for bankable projects with high upfront payment from end-clients.”
In a separate note, CIMB Research highlighted that Yinson is targeting one or two mid-sized FPSO projects within the next 12 months, with projected capital expenditure of US$1bil to US$2bil, focusing on opportunities in the Africa and Asia regions.
Key projects include the Baleine (Eni) and Paon (Murphy Oil) projects in Ivory Coast, Malaysia’s Kikeh project and the Petroleum Exploration License 83 project (Galp Energia) in Namibia’s Orange Basin.
“The recent Lac Da Vang floating storage and offloading contract in Vietnam marks Yinson’s first collaboration with Murphy Oil, enhancing prospects for securing the Paon project in Ivory Coast, in our view,” stated CIMB Research.
The research house also said Yinson remains actively focused on value-unlocking initiatives to raise capital, which could include monetising up to one-third of its FPSO projects.
This process is expected to conclude by the end of FY25 and represents a positive catalyst for enhancing value and enabling further capital recycling.
On Yinson’s earnings, Maybank Investment Bank Research said the group’s results in the third quarter of FY25 missed expectations due to a dip in engineering, procurement, construction, installation and commissioning (EPCIC) profits.
“We lower FY25 to FY26 net profit forecasts by 36% and 31% respectively to account for lower EPCIC revenue and profit margin assumptions while leaving FY25 estimates unchanged. We continue to like Yinson for its strong track record, prospects and steadfast environmental, social and governance initiatives,” it said.
Meanwhile, CIMB Research said Yinson guided for EPCIC profits to improve in 4Q25 as FPSO Atlanta is set to achieve first oil by January 2025. Additionally, 4Q25 will also be supported by the full-quarter contribution from FPSO Maria Quiteria, with its revenue and net profit contributions projected at around RM240mil to RM250mil and RM70mil to RM75mil, respectively.
“Our projections are consistent with the company’s guidance,” stated CIMB Research.
Both Maybank IB Research and CIMB Research have a “buy” call on Yinson.
