Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on June 28, 2018

KUALA LUMPUR: After record earnings in financial year 2018 (FY18), offshore support services company Yinson Holdings Bhd got off to a slow start in the first quarter ended April, posting a profit of RM60.43 million against RM60.29 million a year ago, higher revenues notwithstanding.

Earnings per share for the quarter increased to 5.55 sen per share from 5.54 sen previously. Revenue stood at RM235.18 million, up 36.4% from RM172.41 million in the corresponding quarter last year. In a bourse filing, Yinson cautioned the oil and gas industry remains challenging and uncertain in the short and medium term owing to emerging new alternative energy sources and the financial sector’s more averse risk appetite towards the sector. On top of that, it said the global economy is exposed to increasing trade protectionism while certain geopolitical conditions remain fragile, with higher downside risks.

But it said lagging investments in the sector in the past years could lead to growing demand for depleting global production to be replenished. “Amid the challenging global economic environment and the volatility of other currencies against [the] US dollar, the group shall strive to achieve satisfactory results for the financial year ending Jan 31, 2019.”

On its first-quarter results, Yinson said the marginal increase in net profit was mainly attributable to a better profit contribution margin on higher recorded revenue, lower administrative overheads, lower fair value loss on investment properties, lower net unfavourable foreign exchange movement and lower income tax expense. However, these improvements were offset by higher finance costs of RM40.14 million and lower share of results in joint ventures of RM25.76 million.

It said the revenue increase was mainly contributed by its offshore and marine segment due to the effect of additional bareboat chartering contribution as a result of the deployment of FPSO John Agyekum Kufuor to Ghana that began in June 2017.

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