Yinson group remains steady as its O&G contracts are protected. (The Star) PETALING JAYA: While the plunging crude oil price has wreaked havoc on oil and gas (O&G) stocks, Yinson Holdings Bhd is fairly confident that its margins will be intact on the grounds that its contracts with suppliers are secured. “The group remains steady in the midst of the current correction in oil prices, contributed from our long-term contracts. The rates are fixed over those firm-periods,” said group executive chairman Lim Han Weng (pic) to StarBiz in an email reply. “In the event any of our clients decides to terminate the contracts, we will be compensated with significant termination fees pursuant to the terms of the contracts,” he added. ----------------- Profit.at.Bursa ----------------- At present, Yinson’s order book stands at US$2.06bil (RM7.21bil). It has total borrowings of about RM848.8mil with cash and cash equivalent of RM339.67mil. According to RHB Research Institute, Yinson has reduced its net gearing to 0.3 times from 0.4 times from its one-for-two share split and rights issue exercise of RM562mil. “This allows it room for a further RM2bil in gearing to the maximum limit of 2.5 times to undertake mega floating production, storage and offloading (FPSO) contracts,” it said, adding that the Yinson management was comfortable with a gearing level of between one and 2.5 times. Yinson currently has five existing offshore production and storage projects that included three FPSO jobs and floating storage and offloading vessel (FSO) and mobile offshore production unit (Mopu) jobs. “Four of the projects – FPSO and FSO – are running on a firm-period basis. The projects with those firm periods have their rates locked in until the contract ends, and therefore, the rates of these contracts will not be renegotiated,” he explained. But the market does not seem to be convinced of the fundamentals in relation to O&G companies. Yesterday, Yinson closed at RM2.75 apiece, down six sen, with 3.16 million shares being traded. At the current price, the counter is trading at 24.12 times earnings, which is a higher valuation than its bigger competitor Bumi Armada Bhd, which is trading at 15.53 times. In a filing with the local exchange, the Employees Provident Fund ceased to be a substantial shareholder in Yinson after it disposed of 731,000 shares at an undisclosed price on Dec 18. The fund currently has 49.97 million shares or 4.83% in Yinson. Lim said the recent appreciation of the US dollar against the ringgit had indirectly benefited the group as most of its rates were quoted in US dollar. He added that the company’s cost for its daily operations had also decreased as a result of low oil prices. For the third quarter ended Oct 31, Yinson recorded a higher net profit of RM85.79mil, a four-fold jump from RM15.51mil in the same quarter a year ago, thanks to gains from the disposal of a subsidiary, increase in forex exchange gains and an improvement in its marine segment business. In the quarter alone, the group garnered a forex gain of RM24.82mil. “Our marine sector has also contributed substantially to the group due to the full consolidation of our acquisition of Fred Olsen Productions ASA (FOP),” Lim said. For the nine-month period of its financial year ending Jan 31, 2015, Yinson’s revenue from its marine business that comprises the provision of vessel, barge and marine-related services rose by RM223.43mil from the same period last year due to a higher contribution from its new subsidiary, Yinson Production AS, which it acquired in December 2013. Moving forward, Lim said the group would continue to pursue other prospects in the market and continue to deliver above expectations. “We achieved 100% fleet uptime for most of our assets and will continue this excellent run in our operations,” he said. However, Maybank IB Research said that it expected a weaker fourth quarter for Yinson due to zero contribution from its FPSO Petroleo Nautipa that the company had disposed. On Oct 8, Yinson disposed of its entire equity interest in Nautipa AS for US$57.1mil (RM199.21mil) to BW Offshore Ltd’s wholly owned subsidiary Prosafe Production Public Ltd. However, Maybank IB noted that the vacuum left following the sale of the Petroleo Nautipa FPSO would be mitigated by contributions from Yinson’s Knock Adoon FPSO that has been operating offshore Nigeria since October 2006. This is because the FPSO in Nigeria enjoys a higher charter rate of 9% from October this year, following a one-year contract extension to October 2015. Maybank IB said Yinson was currently vying for an FPSO charter job in Ghana. “An award announcement is due soon. Securing this job (a 15-plus-five-year charter) will be a massive positive to Yinson in terms of franchise value and earnings of about RM160mil per annum from 2017 onwards,” it said. Currently, Yinson’s portfolio of fleet comprises three FPSOs, one Mopu and one FSO with wide geographical presence in West Africa and South-East Asia. “We like Yinson for its long-term contracts and ambitious management. We believe that the market has priced in at least one to two contract wins, which would contribute only from 2016 onwards,” said Kenanga Research in a report. ----------------- Profit.at.Bursa ----------------- | #saham | #yinson |
Posted on: Wed, 24 Dec 2014 11:45:00 +0000
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