KUALA LUMPUR : Maybank IB Research expects Yinson Holdings Bhd to deliver a stronger set of earnings for its fourth quarter ended Jan 31, 2017 (4QFY17) due to improved offshore support vessel (OSV) contributions on higher utilisation.
In a note today, the research house forecast Yinson's core net profit to be in the RM46mil to RM58mil range in 4QFY17, representing a strong year-on-year growth of between 14% and 44%.
“Our core earnings forecast of RM202mil for FY17 is ahead of consensus expectations of RM187mil. The improved results would primarily be driven by higher OSV earnings, an impressive feat considering that its non-oil and gas operations were deconsolidated in 3QFY17,” it said.
Maybank IB is maintaining its 'buy' call on Yinson with a RM4.35 target price.
The firm added that it expects Yinson to secure a contract for the CRD floating, production, storage and offloading (FPSO) contract by April, a job that would potentially add between RM56mil and RM90mil per annum to earnings from FY20 onwards.
On the other hand, the group may also undertake a an impairment exercise to account for existing market valuations, Maybank IB added.
“Similar to its peers, we do not rule out Yinson undertaking some kitchen sinking exercise in 4QFY17, potentially impairing several identified assets (such as the Four Rainbow FPSO which is currently off hire) to market value,” it said.
Yinson is expected to announce its 4QFY17 results by this week.
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