Maybank Research sees Yinson’s Q1 FY17 earnings about RM45m

AmInvestment prefers companies with stable and recurring earnings such as Dialog Group and Yinson

KUALA LUMPUR: Yinson Holdings' core net profit for the first quarter of 2017 (Q1, FY17) is estimated to be RM40mil to RM45mil boosted by its floating storage and offloading vessel (FSO) and floating production, storage and offloading vessel (FPSO) businesses.

Maybank Investment Bank Research said on Thursday the Q1 17 results due late in the day would unlikely spring any surprises as its four FSOs would remain the group’s earnings driver, with high operational uptime.

The conversion of its FPSO Genesis is on track to meet the 2017 delivery target, it said, adding that a potential 15 sen special dividend per share post sale of non-oil and gas (O&G) business by Q2 financial year 2018 (earliest) is a short-term catalyst. 

Yinson remains in position to capitalise on new FPSO opportunities, it noted. 

“A RM40mil-RM45mil core net profit estimate for Q1 17 will account for 22%-25% of our financial year forecast of RM184mil, which is in line. Typically, Q1 tends to be the softest, for most of its operating costs for the financial year are front-loaded. Its FSO/FPSO operations will expectedly be its core earnings generator again, accounting for about 70% of EBIT,” it said. 

Maybank Research's four FPSOs are operating at optimal fleet uptime (about 100%) and offer steady, resilient earnings/cash flows. 

However, this would be partially offset by lower contributions from its offshore support vessels (OSV)/non O&G businesses due to dry-docking costs/lower trading volume,’’ the research house said.

Yinson is in direct competition with Bumi Armada Bhd for the Vietnam CRD FPSO project with awards likely to be announced by end-2016. 

“It also has FPSO Four Rainbow for quick re-deployment opportunities. Securing win(s) is a catalyst, which would extend its growth trajectory beyond FY 19,” Maybank Research said.

Yinson Holdings posted a net profit of RM47.43mil for its Q4 FY16, 52.6% lower than the RM99.91mil a year ago due to a disposal loss in the previous year. Revenue fell 4.9% to RM241.07mil. 

For the full financial year, net profit fell to RM221.99mil from RM247.68mil a year ago on a revenue of RM975.53mil compared with RM1.08bil previously.