Quick take: Yinson shares fall after posting 19% drop in earnings for FY19

KUALA LUMPUR: Yinson Holdings Bhd’s shares fell almost 2% in early trade Thursday after posting a 19.6% drop in its net profit for full financial year ended Jan 31.

The oil and gas services prodiver saw its shares fell 1.96%, or nine sen to RM4.50, making it one of the top losers on Bursa Malaysia.

Yinson’s net profit increase 6% to RM60.7mil for the fourth financial quarter ended Jan 31, 2019 (4QFY19) from RM57.14mil in the previous year’s corresponding quarter.

Revenue for the quarter rose 11.7% to RM287.6mil, compared with RM257.39mil in the corresponding quarter last year.

The group proposed a final dividend of two sen per share for the year.

Yinson’s full-year net profit, however, fell 19.6% to RM234.9mil against RM292.18mil a year ago.

Its full-year revenue grew 13.7% to RM1.03bil from RM910.16mil previously.

CGS-CIMB Research said Yinson’s FY1/19 core net profit of RM182mil was in-line with Bloomberg consensus, but 9% below the house’s forecast, due in part to weaker associate contributions.

“Nevertheless, we maintain our ‘add’ call and upgrade our SOP-based target price to RM5.89, as we raise the value of Yinson’s potential new projects.

“Potential upside catalysts include smooth project execution for the Helang and Abigail-Joseph FPSOs, as well as winning several of its ongoing bids,” CIMB said.

Kenanga Research said Yinson’s FY19 results came in above its expectation due to the house’s more conservative margins assumptions, but was in-line with consensus estimates.

“Overall, results were expectedly poorer from higher finance costs and lower JV contributions.

“However, its forward prospects remain positive, expecting a huge earnings jump in FY21, with the company still actively tendering for further contract wins,” it said, adding that it has maintained its “outperform” on Yinson with SOP-driven target price of RM5.50.

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