Yinson Holdings Bhd., a Malaysian company that builds vessels for offshore oil and gas production, expects to achieve core revenue of nearly $1 billion as early as 2025 amid strong demand, the chief executive office.
“We have never been in such a good position to negotiate contracts,” Chief Executive Lim Chern Yuan said in an interview at his office in Singapore last week. “With our order book, we’re looking at closer to $1 billion of Ebitda in 2025 and 2026.”
Lim’s prediction is substantially above the 3.26 billion ringgit ($700 million), the most optimistic forecast among six analysts polled by Bloomberg for Yinson’s 2026 earnings before interest, taxes, depreciation and amortization. It is also higher than 2.8 billion ringgit, the average of the six.
Vessels known as floating production storage and offloading units are key pieces of infrastructure used by energy companies for offshore oil and gas extraction and processing. Yinson, which has FPSO contracts with companies such as Brazil’s state oil company Petrobras and the Angolan joint venture of energy majors BP Plc and Eni SpA, will add three new vessels in the coming years, Lim said.
The company’s order book of about 100 billion ringgit, which includes both firm contracts and options, will last for 20 years, he said, adding that the company’s order book is the second highest in the world for FPSO companies. Lim added that the company is focused on executing contracts, making sure cash flows come in and deliver on time. “What limits us is always capital and supply chain,” he said.
Beyond Carbon
Like many companies in the energy sector, Yinson is moving towards a green future and diversifying in the process.
Last month, the company signed an agreement to secure $300 million in financing from buyout firm RRJ Capital to part-finance an FPSO for Eni Angola SpA that will incorporate green technologies such as hydrocarbon capping and capture systems of carbon, as part of its goal of building zero. -emissions ship, the CEO said at the time.
In addition to the FPSOs, Yinson will also have nearly 500 megawatts of renewable power generation by the end of 2023 and aims to be worth one gigawatt within a year or two of construction and operation, Lim said. The company plans to have 30 percent of its total capital in green investments by 2030, up from 8 percent this year, he said. The renewables division will be profitable next year, he added.
In 2021, Yinson teamed up with an investment group from SMRT Corp., Singapore’s public transport operator, to co-invest in driverless vehicle technology startup MooVita Pte. Backed by its Yinson GreenTech arm, its chargEV electric vehicle charging infrastructure network operates more than 350 charging stations in Malaysia and two in Singapore, according to its website. Lim said demand for electric vehicles will increase exponentially and the company is committed to building more charging stations to support the transition.
Unlock value
As part of a long-term strategy to unlock value, Yinson would not rule out spinning off some of its businesses or selling a stake to attract strategic investors to help grow the business, Lim said. At the moment, the company has no plans to raise capital.
Yinson, which is listed on Bursa Malaysia, has a market value of 7.2 billion ringgit. Its shares have risen 2.5% this year, outperforming the benchmark FTSE Bursa Malaysia KLCI, which fell 2.2% over the same period.
“We could probably put a little more money into green technology,” Lim said, without elaborating. “It’s something we’d like to grow and build and maintain for the future as it goes hand in hand with renewables,” he added.
