RAM Ratings has assigned an A1/Stable rating to Yinson Holdings Bhd’s proposed Islamic Medium-Term Notes Programme of up to RM1 billion.
Concurrently, Yinson’s corporate credit ratings of A1/Stable/P1 have been reaffirmed. The Group’s credit fundamentals are anticipated to remain supportive of the ratings over the next few years.
“Yinson enjoys stable operating earnings emanating from its long-term contracts. Its consistent position as among the leading floating production systems (FPS) provider to the global offshore oil and gas (O&G) sector is underlined by its proven project execution capabilities. Nevertheless, the ratings are moderated by the Group’s debt load and significant customer concentration risk,” says the rating agency.
With a current fleet of five floating, production, storage and offloading (FPSO) vessels, one floating, storage and offloading vessel and another FPSO under construction, Yinson is the sixth-largest FPSO leasing contractor in the world.
The acquisition of Norwegian firm Fred. Olsen Production ASA – an established global player in the FPS segment – in 2014 boosted Yinson’s FPS business. Notably, since the acquisition, the Group was able to build on its excellent track record and won six FPSO contracts (two were later cancelled).
Yinson expanded rapidly in the last five years, with top-line growing at a compounded annual growth rate (CAGR) of 55% from RM543.26 million in FY Jan 2017 to RM4.85 billion in FY Jan 2021 and operating profit before depreciation, interest and tax (OPBDIT) increasing at CAGR of 35% from RM259.96 mil to RM1.18 billion over the same period. The Group registered revenue and OPBDIT of a respective RM2.05 billion and RM819 million for 1H FY Jan 2022.