KUCHING: Analysts observed Yinson Holdings Bhd’s (Yinson) financial performance for the financial year 2015 (FY15) has performed within their expectations.
They noted Yinson registered strong earnings for FY15 attributed to contributions from its floating, production, storage and offloading (FPSO) businesses and cost savings from favourable foreign currency translation into the company’s statement of financial performance.
RHB Research Institute Sdn Bhd (RHB Research) in a March 30 report said the oil and gas company’s FY15 core profit has met with expectations supported by profit margin expansion from FPSO businesses acquired in December 2013.
The firm observed a significant increase in contribution from the company’s share of joint venture businesses in FY15.
Yinson’s Vietnamese assets – the FPSO Lam Son as well as the floating, storage, offloading (FSO) vessel Bien Dong – contributed to the company’s results at RM37 million despite the sale of Petroleo Nautipa which reduced its contribution to the company’s earnings in FY15.
Explaining further, RHB Research said the loss of contribution from Petroleo Nautipa in the fourth quarter (4Q) of FY15 was offset by higher charter rate for the extension of another FPSO, Knock Adoon.
Yinson’s financial performance in 4QFY15 has also benefited by way of saving in operational expenses due to favourable exchange rates movements in the second half period, as some of the company’s subsidiaries utilised US dollar as reporting currency.
Similarly, the research arm of Maybank Investment Bank Bhd (Maybank IB Research) in a separate report said Yinson’s strong year-on-year (y-o-y) earnings growth in FY15 was driven by contributions from its FPSO operation (Fred Olsen Production), under the offshore marine services division, which made up 83 per cent of the group’s earnings before interest and tax (EBIT).
At this juncture, Maybank IB Research maintained its earnings forecast for Yinson.
Maybank IB Research believes Yinson has the potential to grow further while noting that the oil and gas company’s profit could potentially increase significantly in FY18 once its FPSO Offshore Cape Three Points (OCTP) job offshore Ghana starts operations in September 2017.
Going forward, the research firm expects the job to contribute about RM110 million to RM170 million per annum to the company’s bottom line for the duration of the contract.
Additionally, Maybank IB Research said Yinson is preparing to tender for new jobs which are located in Asia and Africa markets to enhance its future earnings.
Meanwhile, Yinson told Bursa Malaysia on March 27 that its net profit for FY15 jumped 77 per cent y-o-y to RM247.51 million while FY15 revenue increased 15 per cent y-o-y to RM1.08 billion.
For 4QFY15, Yinson said its earnings inched up 1.2 per cent y-o-y to RM99.73 million supported by 1.7 per cent y-o-y improvement in turnover to RM253.62 million.