Stronger FY21 expected for Yinson

KUCHING: Yinson Holdings Bhd’s (Yinson) growth in the financial year 2021 (FY21) is expected to be stronger as several of its projects begin to generate income while more contracts are in the pipeline.

In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) said: “Moving forward, expect sizable earnings jump in FY21E given the commencement of FPSO Helang on December 6, 2019, and FPSO Abigail-Joseph in the first quarter of FY21 (1QFY21).”

Meanwhile, after recently clinching a Marlim FPSO contract, it pointed out that Yinson is still in close contention for Aker Energy’s Pecan FPSO off Ghana, Parque das Baleias FPSO in Brazil, and Limbayong FPSO, in partnership with MISC.

“Materialisation of any of these contract award could provide some catalyst to the counter,” the research team highlighted.

On its first nine months of FY20 results, Kenanga Research noted that Yinson posted a core net profit of RM149.9 million were within expectations.

It said, this was an expected weaker set of earnings with year-on-year (y-o-y) earnings weak (both cumulatively 9MFY20 and 3QFY20) due to the cessation of FPSO Allan’s charter contract in end-FY19.

“The FPSO is currently undergoing conversion works, and is set to be redeployed as FPSO Abigail-Joseph at the Anyala and Madu fields, Nigeria, in 1QFY21. Meanwhile sequentially, results were also slightly poorer on the back of higher finance costs and poorer JV contributions,” it said.

Despite that, Kenanga Research remained optimistic on Yinson’s prospects. It reatined its ‘outperform’ rating on the stock.