KUALA LUMPUR (Sept 24): Yinson Holdings Bhd’s net profit declined nearly 12% to RM73.67 million for the second financial quarter ended July 31 (2QFY19) from RM83.6 million a year ago.

The group attributed the drop in earnings to higher finance costs and lower contributions from its joint ventures, namely comparatively lower scheduled contract chartering rate for Floating Storage and Offloading (FSO) “PTSC Bien Dong 01” and lower chartering rate from the interim contract it entered for the continued deployment of the floating production storage and offloading (FPSO) “PTSC Lam Son”, according to its filing with Bursa Malaysia this evening.

However, Yinson’s quarterly revenue grew 13.5% to RM246.54 million from RM217.23 million a year ago. The increase was mainly attributed to the bareboat chartering contribution from its FPSO “John Agyekum Kufuo”.

Earnings per share in 2QFY18 came in lower at 6.75 sen from 7.68 sen a year ago.

Yinson has declared an interim single-tier dividend of four sen per share, amounting to approximately RM43.4 million, which is payable on Dec 21, 2018

For the first half of its financial year (1HFY19) Yinson saw a 6.8% decline in net profit to RM134.1 million from RM143.88 million in 1HFY18 while revenue grew by 23.6% to RM481.72 million in 1HFY19 from RM389.64 million in 1HFY18.

In a separate statement, Yinson chairman Lim Han Weng said that the group’s second reporting quarter brought some significant developments to its business.

“The successful disposal of 26% of FPSO John Agyekum Kufuor in June 2018 to a Japanese consortium brought positive earnings to the company — but further than that it also paved the way for us to enter into a 10-year binding Memorandum of Understanding with Sumitomo Corporation, one of the members of this consortium, on the future collaboration of FPSO and FSO projects.

“Forging of long-term strategic alliances with strong counterparties is one of Yinson’s key credit strengths, and we will continue to be on the lookout for such opportunities.

“This quarter also saw Yinson and First E&P [Development Co Ltd] working towards the conclusion of our Head Of Terms agreement for the supply and charter of a FPSO unit for the Anyala and Madu fields in offshore Nigeria.

“The agreement is a testament to the industry’s growing confidence in Yinson’s ability to deliver quality solutions for offshore oil and gas production,” he said.

On prospects, the group noted that the most recent report from Energy Maritime Associates confirms a strong start in the FPSO industry this year with nine projects awarded, and another 30 potential projects over the next 12 months.

“With the demand of FPSO at its highest since 2012, we remain optimistic that we will be able to continue growing our business for long term sustainability,” said Lim.

Yinson shares closed unchanged at RM4.55 today for a market capitalisation of RM4.9 billion.