KUALA LUMPUR: Removing the one-off items and engineering, procurement, construction, installation and commissioning (EPCIC) gains, Yinson Holdings Bhd's financial year ended Jan 31 2023 results surprise RHB Research positively.
RHB Research said the performance led by better floating production storage and offloading (FPSO) operations and unexpected cost writeback.
"We continue to like the counter for its exponential growth trajectory (41 per cent three-year compound annual growth rate) backed by maiden contribution from three upcoming vessels while continuing its aggressive ventures into green technology and renewables," the firm said in a report today.
Yinson's FY23 core profit of R338 million (up eight per cent year-on-year) surpassed RHB Research's full-year estimate at 152 per cent due to unexpected cost writeback and better FPSO
operations.
"We have stripped off RM398 million EPCIC earnings in arriving at our core profit. We believe street estimates may not be a good comparison, as other analysts regard Yinson's EPCIC earnings as core profit," it said.
RHB Research raised its FY24-25 earnings by 4.0-7.0 per cent to better reflect FPSO contributions, while FY23-24 EPCIC revenue should be maintained, led by contributions from FPSO Maria Quitéria and Atlanta.
Despite earnings adjustments, the firm's sum-of-the-parts based target price is cut slightly to RM3.12 (including a 4.0 per cent ESG premium) with an update of Yinson's net debt position.
The firm noted that downside risks for Yinson included further contract terminations and weaker-than-expected operating uptime for existing vessels.