Navigating a Dynamic Landscape: Yinson Holdings’ Q1 FY2026 Performance Deep Dive
Yinson Holdings Berhad, a global energy infrastructure company, has just released its unaudited financial results for the first quarter ended 30 April 2025 (Q1 FY2026). This report offers a comprehensive look into the company’s performance, strategic shifts, and future outlook amidst a evolving energy landscape. Let’s break down the key takeaways for Malaysian retail investors.
Overall Financial Performance: A Mixed Bag in Q1 FY2026
Yinson Holdings reported a notable decrease in its top-line and bottom-line figures for the quarter compared to the same period last year. This was primarily influenced by a strategic transition in its core business activities.
Q1 FY2026 (Ended 30 April 2025)
Revenue: RM1,230 million
Profit Before Tax (PBT): RM195 million
Profit for the Period (PAT): RM134 million
Profit Attributable to Owners: RM115 million
Basic Earnings Per Share (EPS): 2.9 sen
Q1 FY2025 (Ended 30 April 2024)
Revenue: RM2,214 million
Profit Before Tax (PBT): RM357 million
Profit for the Period (PAT): RM249 million
Profit Attributable to Owners: RM203 million
Basic Earnings Per Share (EPS): 5.6 sen
The 44.4% decline in revenue and 45.4% drop in PBT largely stemmed from lower contributions from Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) activities. This is due to the FPSO Maria Quitéria and FPSO Atlanta projects achieving ‘first oil’ in Q3 and Q4 FY2025 respectively, shifting their revenue recognition from construction progress to operational contributions. Additionally, the disposal of Yinson Boronia Consortium Pte Ltd (YBC), the holding company of FPSO Anna Nery, from a subsidiary to a joint venture, means its profits are now recognized as ‘share of profits of joint ventures’ rather than consolidated revenue.
Despite these factors, the decrease was partially offset by lower income tax expenses in the current quarter, resulting from a change in the tax basis for the Group’s Offshore Production operations in the Netherlands.
Segmental Performance: Shifting Contributions
A closer look at Yinson’s business segments reveals varied performances:
Offshore Production & Offshore Marine
This segment saw a revenue decrease of RM1,006 million to RM1,174 million (Q1 FY2025: RM2,180 million), with segment results also declining by RM253 million to RM530 million (Q1 FY2025: RM783 million). As explained, this reflects the reduced EPCIC activity as major projects near completion or enter operation, and the reclassification of YBC’s contribution.
Renewables
A bright spot, this segment generated a profit of RM16 million (Q1 FY2025: RM5 million). The improvement was mainly driven by the Matarani Solar Plant’s operations, which commenced in September 2024, alongside stable contributions from Bhadla and Nokh operations.
Green Technologies
The Green Technologies segment reported a higher loss of RM17 million (Q1 FY2025: RM10 million), attributed to increased operating costs incurred to support the expansion of business activities within this growing segment.
Other Operations
This segment’s loss slightly narrowed to RM48 million (Q1 FY2025: RM50 million), with operating costs remaining in line with the Group’s expectations.
Share of Results of Joint Ventures and Associates
This category saw a significant increase, contributing a collective profit of RM64 million (Q1 FY2025: RM1 million). This surge was primarily due to the equity-accounted contributions from YBC, EPCIC activities for the Lac Da Vang FSO project, and the Group’s investment in Lianson Fleet Group Berhad.
Financial Health: Prudent Management Amidst Growth
Yinson’s balance sheet reflects its ongoing project execution and strategic financial management:
As at 30 April 2025
Total Assets: RM25,808 million
Total Equity: RM7,479 million
Net Assets Per Share: RM1.89
Current Ratio: 1.47 times
Net Gearing Ratio: 1.87 times
As at 31 January 2025 (Audited)
Total Assets: RM25,788 million
Total Equity: RM7,864 million
Net Assets Per Share: RM1.95
Current Ratio: 1.58 times
Net Gearing Ratio: 1.69 times
While total assets remained relatively stable, total equity saw a slight decrease, leading to a marginal dip in net assets per share. The Current Ratio decreased to 1.47 times from 1.58 times, mainly due to increased current liabilities from drawdowns of existing term loans and revolving credit facilities. However, excluding project accruals, the Current Ratio would have been a healthier 1.64 times, indicating prudent cash and working capital management.
The Net Gearing Ratio increased to 1.87 times, reflecting higher leverage for project execution needs. Despite this, the Group’s strong total equity position of approximately RM7.5 billion provides a solid foundation. Yinson maintains sufficient liquidity with RM2.4 billion in undrawn borrowing facilities and RM1.2 billion available in its perpetual securities programmes, strategically opting to maintain short-term payables in the current high interest rate environment rather than incurring higher financing costs.
Cash Flow Performance
The Group’s cash flow statement shows a significant improvement in operating cash flows:
| Cash Flow Category | Q1 FY2026 (RM million) | Q1 FY2025 (RM million) | Change (RM million) |
|---|---|---|---|
| Net cash flows used in operating activities | (113) | (786) | 673 |
| Net cash flows used in investing activities | (88) | (288) | 200 |
| Net cash flows generated from financing activities | 71 | 33 | 38 |
| Net decrease in cash and cash equivalents | (130) | (1,041) | 911 |
The substantial reduction in net cash used in operating activities, from RM786 million to RM113 million, is a positive sign, indicating better working capital management and potentially a shift in project phases. Overall, the net decrease in cash and cash equivalents significantly improved from RM1,041 million to RM130 million.
Dividends: Returning Value to Shareholders
Yinson continues to reward its shareholders. The company declared a final single-tier dividend of 1.0 sen per ordinary share for FY2025 (Q4 FY2025), with an option for reinvestment. A total of RM27.8 million was paid, with RM21.4 million in cash and RM6.4 million reinvested.
Looking ahead, the Directors declared an interim single-tier dividend of 2.0 sen per ordinary share for the financial year ending 31 January 2026, amounting to approximately RM56 million. This dividend is payable on 26 September 2025.
Risks and Prospects: Strategic Positioning for the Future
Market Outlook & Opportunities
Yinson remains optimistic about its core businesses. The global demand for clean, affordable, and stable energy continues to fuel expansion across all business units. The FPSO market, in particular, shows strong demand, especially from Brazil and West Africa, where Yinson’s expertise in emissions reduction and track record for on-time delivery gives it a competitive edge.
The acceleration of the energy transition, driven by elevated energy prices, is also directing more investments into renewable and alternative energy sources, supporting the growth of Yinson’s renewables pipeline in Latin America, Asia Pacific, and Europe.
Strategic Focus & Challenges
The Group is transitioning from a CAPEX-intensive EPCIC phase to an operational phase, with the Agogo FPSO set to commence its charter period in the coming year, promising steady, contracted income streams for decades. This shift means a temporary pause on large new investments until current deliverables are met and cash flows commence.
Yinson acknowledges the prevailing macroeconomic headwinds, including geopolitical uncertainties, inflation, and tightened financial conditions. To mitigate these, the Group employs measures such as hedging, effective forecasting, diversification of costs across geographical markets, and factoring inflation risk into its contracts. The company also continually reviews its non-FPSO businesses for streamlining opportunities to focus on core areas.
Litigation Update
Yinson is involved in two material litigations concerning its indirect subsidiary, Rising Sun Energy (K) Private Limited (RSEK):
- RSEK’s Claim against NTPC Limited and Chhattisgarh State Power Distribution Company Limited: RSEK sought RM183 million in compensation for changes in law affecting its power purchase agreement. The Central Electricity Regulatory Commission (CERC) largely ruled in RSEK’s favor, awarding approximately RM203 million. However, Chhattisgarh has appealed this order, and while an interim order allowed RSEK an increase in tariff for carrying costs, the final hearing has yet to be scheduled.
- Chhattisgarh’s Claim against RSEK and NTPC: Chhattisgarh is seeking RM47 million from RSEK, arguing that the abolition of a safeguard duty constitutes a change in law from which RSEK benefited. RSEK has filed a reply, arguing against the petition’s merits and its timeliness.
Summary and Investment Outlook
Yinson Holdings’ Q1 FY2026 results reflect a period of strategic transition, with a temporary dip in consolidated revenue and profit primarily due to the shift from EPCIC to operational phases for key projects and the reclassification of a significant asset. However, the strong performance of its Renewables segment and the substantial increase in joint venture contributions highlight the diversification and future growth potential of the Group.
The company’s financial health, while showing increased gearing due to project funding, remains robust with ample liquidity and a prudent approach to managing liabilities in a high-interest rate environment. The declaration of a 2.0 sen interim dividend signals continued confidence in future earnings.
Looking ahead, Yinson is poised for stable, long-term contracted income streams as its major FPSO projects become fully operational. While macroeconomic headwinds and ongoing litigation present challenges, the Group’s proactive risk management strategies and strong focus on sustainability are expected to support satisfactory results for the financial year ending 31 January 2026.
- The transition from CAPEX-intensive EPCIC to an operational phase for major FPSO projects will impact near-term revenue recognition but promises stable, long-term income.
- Growth in the Renewables segment and strong contributions from joint ventures are positive indicators of diversification and future earning potential.
- While gearing has increased, the company maintains healthy liquidity and is strategically managing its financing costs amidst a challenging interest rate environment.
- Ongoing material litigations could introduce uncertainties, but the company is actively defending its position.
- Macroeconomic factors such as inflation and geopolitical uncertainties remain key risks, which Yinson is addressing through various mitigation strategies.
Yinson Holdings is clearly navigating a complex yet promising period, adapting its strategies to capitalize on the energy transition while managing inherent industry and macroeconomic risks. The focus on long-term, stable income streams from its operational assets positions the company for sustained value creation.
What are your thoughts on Yinson’s strategy to transition from a CAPEX-intensive phase to a more operational, stable growth phase? Do you think the company can maintain this growth momentum in the next few years? Share your insights in the comments below!
