Yinson Holdings Berhad delivered a steady start to the financial year, with first-quarter FY2027 (1QFY27) earnings largely meeting expectations as recurring floating production, storage and offloading (FPSO) lease income helped cushion weaker engineering, procurement, construction, installation and commissioning (EPCIC) contributions.
The group reported core net profit of RM141 million for 1QFY27, adjusted for RM21 million in additional one-off works related to its existing FPSO assets. The result represented around 21% of full-year expectations, according to Kenanga Research.
Yinson also declared an interim dividend of RM0.02 per share, which was broadly in line with market expectations.
FPSO Agogo lease contribution supports earnings
Yinson’s revenue declined 15% year-on-year (YoY) during the quarter, mainly due to lower EPCIC revenue recognition following the completion of conversion-related revenue from FPSO Agogo in 1QFY26.
However, the impact was partly offset by the commencement of lease revenue from FPSO Agogo, which helped lift Yinson’s core net profit by 4% YoY.
The company’s FPSO portfolio continues to provide stable recurring income streams, supporting earnings resilience despite fluctuations in project-based revenue.
Sequential earnings weakened on lower project recognition
On a quarter-on-quarter (QoQ) basis, revenue slipped 7% due to reduced EPCIC revenue recognition.
Core earnings were also lower compared with the previous quarter, affected by weaker joint venture contributions following the absence of a rate escalation gain from FPSO Anna Nery.
Outlook remains positive on FPSO growth pipeline
Kenanga Research maintained its earnings forecasts and target price of RM2.76 for Yinson, supported by the company’s recurring cash flow profile and long-term growth potential.
The research house highlighted Yinson’s strong FPSO portfolio, established project execution capabilities and the expected increase in demand for FPSO contractors over the coming years.
The group may also explore monetising its FPSO assets through a potential separate listing of its FPSO business in international markets, which could unlock additional value.
Upcoming Vietnam FPSO projects to support future growth
Despite recent share price weakness, Kenanga said the decline appeared unjustified given Yinson’s consistent recurring income base and future growth prospects.
Growth is expected to strengthen from FY2028 onwards, supported by two upcoming Vietnam FPSO projects.
Meanwhile, Yinson’s green energy division showed signs of improvement, recording a profit of RM2 million in 1QFY27 compared with a loss of RM17 million in the previous corresponding quarter.
The improvement was attributed to lower overhead costs after the group discontinued unprofitable businesses in FY2026.
Kenanga maintained an “Outperform” recommendation on Yinson.
However, key risks include elevated overhead costs, regulatory uncertainties and uncertain returns from renewable energy investments concentrated in emerging markets such as South America and India.
The group also faces project execution risks, including potential cost overruns, delays and operational downtime affecting FPSO assets.
