KUALA LUMPUR (Sept 30): Yinson Holdings Bhd’s (KL:YINSON) net profit fell 11.74% to RM203 million in the second quarter ended July 31, 2024 (2QFY2025), from RM230 million a year ago, on the back of lower revenue and as finance costs more than doubled.

Earnings per share came in lower at 5.6 sen in 2QFY2025, from 6.7 sen in 2QFY2024.

The oil and gas floating production storage and offloading (FPSO) asset operator declared an interim single-tier dividend of one sen per share, amounting to RM30 million. This brings its dividend payout to two sen per share for 1HFY2025.

Quarterly revenue dropped 31.19% to RM2.14 billion, from RM3.11 billion, mainly due to lower contribution from its engineering, procurement, construction, installation and commissioning (EPCIC) segment.

Finance costs, however, rose by RM243 million or 120% to RM445 million.

As at July 31, 2024, the group’s total loans and borrowings stood at RM19.58 billion, a 77% increase compared to RM11.06 billion a year ago. Its net gearing ratio currently stands at 1.84 times.

It said the increase in total outstanding loans and borrowings was mainly due to additional loan facilities being drawn down for project and working capital purposes.  

For the first half of FY2025 (1HFY2025), its net profit also declined by 7.31% to RM406 million, from RM438 million in 1HFY2024, while revenue shrank by 28.95% to RM4.36 billion, compared to RM6.13 billion previously.

“The decrease in revenue was mainly due to lower contribution from EPCIC activities (based on progress of construction) as FPSO Maria Quitéria and FPSO Atlanta are expected to be completed by the end of FY2025," it said.

The lower revenue was also due to the absence of the one-off effect of the exercise of the call option for the acquisition of FPSO Atlanta's holding entity last year.

“This was partially offset by higher contribution from FPSO Anna Nery’s operations since first oil was achieved on May 7, 2023,” it added.  

On prospects, Yinson sees expansion in all business units, including clean energy production and solutions, on top of its core FPSO projects.

“The demand for FPSOs is positive with the increase in project sanctions around the world particularly from Brazil, being the highest FPSO demand centre, followed by West Africa,” it said.  

Yinson also said the broader effect of elevated energy prices is the acceleration of the energy transition, as more investments pour into developing renewable and alternative sources of energy.

“This has supported the progress of our renewables pipeline in our core markets of Latin America, the Asia Pacific and Europe,” it noted.  

Three FPSOs — Atlanta, Maria Quitéria and Agogo — would commence their charter periods over the next year or two, Yinson said.

“The strong focus on deliveries will also mean giving big investments a break until these deliverables are met and the start of the cash flows are seen,” it explained.

At the noon market break on Monday, Yinson's share price was four sen or 1.5% lower at RM2.64, bringing the group a market capitalisation of RM8.46 billion.