This article first appeared in The Edge Financial Daily on September 28, 2017

KUALA LUMPUR: Yinson Holdings Bhd’s quarterly net profit grew 38.5% year-on-year (y-o-y) in its second quarter ended July 31 (2Q), thanks to the chartering commencement of its floating production, storage and offloading (FPSO) vessel John Agyekum Kufuor (JAK) in Ghana under its marine business in June.

Quarterly net profit rose to RM83.6 million from RM60.36 million in the second quarter of financial year 2017 (2QFY17), while revenue jumped 89.8% to RM217.23 million from RM114.45 million, its Bursa Malaysia filing yesterday showed.

Earning per share grew to 7.68 sen against 5.54 sen in the same quarter last year. The company declared a 4 sen interim dividend in respect of its FY18, payable on Dec 22.

For the first half of its financial year ended July 31 (1HFY18), Yinson’s net profit jumped 73.9% y-o-y to RM143.88 million from RM82.74 million, as revenue improved 69.5% to RM389.64 million from RM229.84 million.

It said the earnings improvement in the 1HFY18 was mainly due to better profit contribution on higher recorded revenue from its marine business, and lower impairment loss on trade and other receivables of RM10.84 million.

The marine buiness has been Yinson’s core contributor since it became a full-fledged FPSO operator.

It said the short- to medium-term prospects for the oil and gas sector remains challenging amid oversupply, emergence of alternative energy sources and financial institutions’ risk appetite towards the sector.

“Overall global economic conditions remain challenging, with higher downside risks. Moving forward, global economic activity is expected to remain subdued despite unprecedented easing of monetary conditions in major economies.

“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, 2018,” it added.

Yinson shares slid 0.85% or three sen to close at RM3.48 yesterday, giving it a market capitalisation of RM3.79 billion. Year to date, the stock has climbed 20.42%.