Yinson switches to O&G sector

JOHOR BARU: Yinson Holdings Bhd is downsizing its current core activities of land transportation and logistic services businesses to focus on building and developing its oil and gas (O&G)-related activities.

Chairman and managing director Lim Han Weng said the company's long term business objective was to become one of the main regional players in the O&G sector.

“Right now, we are considered as the new kid on the block but in years to come, we foresee ourselves to be among the prominent players in the O&G sector,” he told StarBiz after the company's AGM recently.

Lim said the company anticipated that the O&G activities would contribute 80% of its total earnings in the next five years and the balance of 20% from the land transportation logistic services businesses.

He said the way forward for the company to make its mark in the competitive O&G sector was to team up with another party which was more experienced in offering related services to the O&G clients.

Yinson and PetroVietnam Technical Services Corp (PTSC) had in May this year secured floating storage and off-loading (FSO) contract on bareboat charter basis worth US$331mil for a firm period of 10 years with the options to extend for another 10 years.

“Vietnam will be a platform and launching pad for us to build up our reputation and capacity before venturing to other countries in the region,” said Lim.

Meanwhile, executive director Lim Chern Yuan said the company planned to increase the number of its FSO vessel from one now as the sector there required at least four new FSO vessels yearly.

He said it had proposed renounceable two-call rights issues of up to 131.857 million new ordinary shares of RM1 each at an issue price of RM0.75 sen and the proceeds of RM84mil would be used to part finance the purchase of a new FSO vessel.

Chern Yuan said the company decided to focus on the offshore support services (OSS) as there were not many players in the region which specialised in the segment.

“We are currently bidding for OSS contracts in Malaysia, Indonesia and Thailand worth RM800mil and confident of securing part of it as only five bidders are involved,” said Chern Yuan.

For the financial year ended Jan 31, 2011, Yinson recorded RM18.54mil net profit on RM640.81mil revenue against RM7.95mil and RM470.17mil respectively in the previous year.

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