PETALING JAYA: Yinson Holdings Bhd
’s earnings is expected to be tempered down from its record earnings primarily due to a drop in engineering, procurement, construction, transportation and installation, as well as hook-up and commissioning services (EPCIC) contribution.
Post-fourth quarter (4Q24) earnings report, CIMB Securities raised the company’s core net profit forecast for financial year 2025 (FY25) by 34% to account for the remaining EPCIC works.
However, the research house opted to keep the forecast relatively unchanged for FY26, as it assumed there would be no additional EPCIC works on new floating production, storage and offloading (FPSO) projects.
“Overall, we anticipate Yinson’s FY25-FY26 core net profit to decline at a two-year compounded annual growth rate of 12%, primarily due to a drop in EPCIC contribution, partly offset by production contributions from FPSO Atlanta and Maria Quiteria,” it said.
CIMB Securities pointed out that Yinson’s EPCIC earnings contribution has been declining since 3Q24, as the EPCIC of all three new FPSOs are reaching completion.
“Therefore, we expect Yinson’s FY25 core net profit to fall by 19.8% year-on-year (y-o-y) and ease further by 4.2% y-o-y in FY26 upon completion of FPSO PTSC Lam Son’s production at the end of 2024,” it said.
However, this will be partly offset by the production contribution of FPSO Atlanta, which sailed away to Brazil on March 21 with first oil targeted for mid-2024.
Upon achieving first oil, the research outfit said a 15-year firm plus a five-year option contract will immediately commence with a total contract value of up to US$2bil.
Similarly, FPSO Maria Quiteria is targeted to sail away from Shanghai in 2Q24 and achieve first oil in 3Q24.
CIMB Securities projected FPSO Atlanta to contribute about 10% of Yinson’s earnings for FY25-FY27, while 15% on average from FPSO Maria Quiteria.
RHB Research, meanwhile, is optimistic about FPSO market outlook, citing a robust demand particularly in regions like Brazil and Africa, where upcoming tenders present lucrative opportunities.
“Yinson is comfortable securing another project once either of the projects reaches the tail-end conversion stage. We also see the potential monetisation of its FPSO units as a near-term catalyst for capital recycling,” it said.
However, after factoring in higher finance and operating costs, the research outfit cut its earnings forecast for FY25 and FY26 by 12%.
Similarly, Kenanga Research maintained its positive outlook on Yinson, citing a strong FPSO order book pipeline and strategic investments in green technology.
