Quick take: Yinson shares up on improved earnings

KUALA LUMPUR: Shares in Yinson Holdings Bhd climbed in early trade Friday after reporting a 26% growth in net profit in the second quarter ended July 31.

The group climbed 0.61%, or three sen to RM4.93 at 9.24am. In the past one year, the counter has fallen 13.5%.

Yinson’s net profit jumped 26% to RM126mil in the second quarter ended July 31 from RM100mil in the same period a year ago, lifted by its engineering business.

Revenue during the quarter increased 5.9% to RM1.05bil from RM995mil in the corresponding period a year ago.

The company has proposed an interim dividend payout of 4 sen a share.

In the first six months to July 31 (1HFY22), Yinson posted a net profit of RM238mil on revenue of RM2.04bil.

Kenanga Research said Yinson’s IHFY22 core net profit of RM234mil came in slightly below its expectation at 43% of its full-year forecasts, as the house may have overestimated Yinson’s EPCIC (engineering, procurement, construction, installation & commissioning) profit contribution.

“Nonetheless, we would like to emphasize that these EPCIC profits arose due to the adoption of finance lease accounting, and hence, are non-cash in nature and do not impact its fundamental valuations.

“That said, against consensus, 1HFY22 is deemed to be in line with expectations at 50% of earnings forecast. First interim dividend of 4.0 sen per share is also within expectations,” Kenanga said.

The research house noted that Yinson had recently entered into exclusive negotiations with Enauta for the Atlanta FPSO, with an official contract award expected in 1QCY22.

Meanwhile, it is still in active bids for Limbayong and Pecan.

Kenanga has maintained its outperform on Yinson with a target price of RM6.

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