CEO Morning Brief

Yinson's Net Profit Dips in 1Q Amid Lower Revenue, Increased Finance Costs

Publish date: Thu, 20 Jun 2024, 10:25 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 19): Yinson Holdings Bhd's (KL:YINSON) net profit for the first quarter ended April 30, 2024 (1QFY2025) dipped by 2.3% year-on-year to RM203 million from RM208 million, due to lower revenue coupled with increased finance costs of RM171 million arising from higher drawdowns to support project execution.

Earnings per share fell to 5.6 sen from 6.1 sen, the energy infrastructure and technology company's bourse filing showed.

Revenue for the quarter dropped 26.6% to RM2.21 billion from RM3.02 billion in 1QFY2024, mainly attributed to lower earnings from the offshore production and marine segment.

It said the segment was impacted by reduced engineering, procurement, construction, installation, and commissioning (EPCIC) activities as floating production storage and offloading (FPSO) units Maria Quitéria and Atlanta near completion. This decline was partially offset by new contributions from FPSO Anna Nery.

Yinson declared an interim single-tier dividend of one sen per share, with the entitlement date and payment date to be determined later.

On a quarter-on-quarter basis, net profit fell 26.9% from RM278 million in 4QFY2024, as revenue decreased by 18.1% from RM2.7 billion, mainly due to lower contributions from EPCIC business activities.

Looking forward, Yinson remains optimistic about the future of its businesses, as global demand for clean, affordable, and stable energy is driving expansion across all business units.

In particular, the group highlighted a rising need for FPSO activities, particularly from contractors skilled in emissions reduction and on-time delivery, with substantial interest observed in Brazil and West Africa.

As FPSO Atlanta, FPSO Maria Quitéria, and FPSO Agogo commence their charter periods over the next year or two, Yinson expects to enter a phase of stable growth with steady, contracted income streams for decades.

However, Yinson acknowledged various market uncertainties and stated it will continue to implement measures to prudently manage inflation and interest rate risks, including hedging, effective forecasting, cost diversification, and strategic inventory management.

Shares in Yinson closed unchanged at RM2.34 on Wednesday, giving the group a market capitalisation of RM7.45 billion.

Source: TheEdge - 20 Jun 2024

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