KUALA LUMPUR (June 23): Yinson Holdings Bhd said the A1 and A+ corporate ratings it received from two rating agencies  are supported by its business position within the global oil and gas floating, production, storage and offloading (FPSO) sector.

"The ratings are also backed by Yinson’s long-term, contractual revenue that are unaffected by crude oil prices, coupled with implementation of strategies to increase our capital velocity through equity sell-down, refinancing and re-leveraging order book backlogs," the group said in a statement today.

Yinson secured corporate credit ratings of  A+ with a stable outlook from Malaysian Rating Corporation Bhd (MARC), and    A1 with a stable outlook from RAM Rating Services Bhd.

The group noted that both MARC and RAM opined that the group’s strong business profile is underpinned by its capability to secure recurrent sizeable long-term FPSO contracts which in turn provided earnings visibility and healthy profit margins. The group’s long-term contracts are up to 25 years.

Yinson has amassed a sizable orderbook of US$9.74 billion as at end of March.

"The rating agencies also took into account that Yinson’s contractual revenue is unaffected by crude oil prices, with robust contract terms built in to ensure adequate compensation should termination occur.

"RAM and MARC also noted that Yinson has demonstrated timely FPSO deliveries and cost containment during the construction period; and achieved operational uptime of above 99% in the last five years," the group said.

Commenting on the recognition, Yinson group CEO Lim Chern Yuan said: “The double A1/A+ rating is a confirmation of Yinson’s solid credit profile and strong track record in delivering on our commitments over the years. Despite the unprecedented pandemic, we have proven that our business is resilient with the quality of our long-term contracts.

"Our business remains buoyant and we are well equipped to deliver stronger earnings through the contributions of each of our business divisions as we continue to gear for greater growth in the energy and technology industry," he added.

Yinson chief strategy officer Daniel Bong said the ratings are an important indication of Yinson’s strong capacity to meet its financial obligations, as well as a key prerequisite for the company’s expansion and growth plans.

He said Yinson’s strategies to increase capital velocity through equity selldown, refinancing and re-leveraging order book backlogs, allowed the group to better manage cash flow requirements of ongoing projects whilst building a substantial cash and cash equivalent reserve for operations.

Yinson noted that the group diversified into renewables in 2019, and has grown its renewables footprint rapidly through the acquisition of 95% of Rising Sun Energy Ltd which owns operating solar plants of 140MW and securing contract for the construction and operation of a 190MW solar plant in the Nokh Solar Park in India's Rajasthan state.

Earlier this week, Yinson announced its collaboration with Chile-based renewable energy developer Verano Capital Holdings SpA to progress a pipeline of over 800MW of utility scale solar projects.

Its Green Technologies division — established in September 2020 — has already announced investments into advanced hydrofoil technology for light marine crafts, autonomous driverless solutions and battery swap e-mobility infrastructure, the group noted..

Yinson's share price closed two sen or 0.4% higher at RM4.99, for a market capitalisation of RM5.49 billion.