KUALA LUMPUR (March 25): Yinson Holdings Bhd, which will announce its results next week, is unlikely to spring any surprises, but an expected special dividend of 15 sen after the planned divestment of its non-oil and gas (O&G) operations by the second half this year is a short-term catalyst for the stock.
According to Maybank Investment Bank Research, Yinson may post a core net profit of RM40 million to RM49 million for the fourth quarter ended Jan 31, 2016 (4QFY16), a year-on-year growth of 7% to 32%.
This would bring the group's FY16 core earnings to RM172 million to RM181 million, which is within the research house's forecasts but below consensus' forecasts of RM193 million.
The research house opined that the floating, storage and offloading (FSO) or floating production, storage and offloading (FPSO) operations continue to be the group's key earnings driver; however, it expects weaker earnings from offshore support vessel and its non-O&G operations (trading and transport).
Based on historical trend, the research house does not rule out a dividend per share (DPS) for the quarter.
It also highlighted that post sale of the group's non-O&G business, Yinson will generate steady cash flows from its FSO or FPSO operations, potentially turning it into a dividend play stock.
Meanwhile, as the planned divestment of its non-O&G operations is expected to be completed by the second half of 2016, the research house expects shareholders to be rewarded with a special DPS of 15 sen from this transaction.
However, the research house expects the group's FY17 to be a flattish earnings year as it prepares for the delivery of its FPSO Genesis, which is on schedule for first oil production in 2017.
"We expect FPSO Genesis to contribute RM50 million (a 6-month impact) to Yinsons' FY18 earnings," it said.
The research house reiterated its "buy" call on the stock, with target price of RM4.35.
At 11am, Yinson shares were 4 sen or 1.45% lower at RM2.71. The counter saw 142,000 shares traded, for a market capitalisation of RM2.97 billion.