Yinson clinches RM9.2b billion FPSO vessel contract

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KUALA LUMPUR (Jan 28): Yinson Holdings Bhd clinched a US$2.54 billion (RM9.16 billion) floating production, storage and offloading (FPSO) vessel charter contract for oil and gas (O&G) support operations in Ghana.

In a filing with Bursa Malaysia today, Yinson (fundamental: 1.5; valuation: 1.5) said it clinched the contract from Italy-based O&G firm Eni S.p.A's unit in Ghana.

Yinson said : "The contract is for a firm charter period of 15 years with 5 yearly extension options exercisable by the client.

"The estimated aggregate value of the contract (excluding reimbursable and cost escalation) during the firm charter period is approximately up to USD2.539 billion (equivalent to approximately RM9.158 billion at an exchange rate of USD1:MYR3.607) and an estimated total aggregate value of up to USD3.256 billion (equivalent to approximately RM11.744 billion at an exchange rate of USD1:MYR3.607) if eni Ghana exercises all 5 yearly extension options," Yinson said.

Yinson said it secured the contract via a consortium comprising Yinson Production (West Africa) Pte Ltd (YPWA) and Yinson Production West Africa Ltd (YPWAL).

YPWA is a wholly-owned subsidiary of Yinson, which also owns 49% in YPWAL. The balance 51% stake in YPWAL is held by Oil and Marine Agencies Ghana Ltd.

According to Yinson, the contract involves the charter, operation and maintenance of the FPSO facility at the Offshore Cape Three Points Block (OCTP), located in the Tano Basin, which is
approximately 60 km off the coast of Ghana.

"Pursuant to the contract, YPWA is the FPSO chartering company while YPWAL is the company engaged in the operation and maintenance of the FPSO.

"The FPSO is expected to commence operations in the OCTP block in 2017," Yinson said.

Looking ahead, Yinson said the contract would contribute to its revenue and earnings beginning financial year ending January 31, 2018.
 
Today, Yinson's share trade was suspended between 9am and 10am in conjunction with the
contract announcement. When trading resumed, the stock rose as much as eight sen or 2.8% to  RM2.98 before trading at RM2.93 for a market capitalisation of RM3.03 billion.

Yinson shares had gained 9% this year, surpassing the FBM KLCI's 2% gain.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)