[RAM] RAM Ratings assigns A3/Stable preliminary rating to Yinson Holdings' Subordinated Perpetual Islamic Notes Programme

RAM Ratings has assigned an A3/Stable preliminary rating to Yinson Holdings Berhad’s (Yinson Holdings’ or the Group) previously unrated Subordinated Perpetual Islamic Notes Programme (the Programme) of up to RM1.0 bil. The final rating will be assigned when the amended terms of the programme are finalised and the necessary consent is obtained. The Group’s existing ratings (see Table 1) were last affirmed on 11 August 2023. 

The Programme is rated two notches below Yinson Holdings’ long-term corporate credit rating (rated A1/Stable/P1) to reflect its subordinated position and the risk of deferrable profit distributions. Since the last review in August 2023, the Group’s business and financial performance have been largely within expectations. Its top line jumped to RM6.09 bil in 1H FY Jan 2024 (1H FY Jan 2023: RM2.59 bil) after revenue from engineering, procurement, construction, installation and commissioning (EPCIC) operations more than doubled, supported by modest growth in floating, production, storage and offloading (FPSO) operations. The Group’s latest FPSO vessel, Anna Nery, started earning time-charter revenue after achieving first oil on 7 May 2023. The stronger EPCIC operations lifted Yinson Holdings’ bottom line to RM678 mil (1H FY Jan 2023: RM437 mil). 

Balance sheet strength and cashflow debt coverage were also largely within expectations. As at end-July 2023, total debts increased to RM12.95 bil (end-January 2023: RM11.48 bil), mainly from higher drawdowns of long-term loan facilities to fund existing EPCIC projects. Excluding non-recourse loans, gearing was an improved 1.26 times (end-January 2023: 1.74 times). Meanwhile, adjusted operating cash flow (based on the Group’s share of total project free cash flow) is envisaged to stay at around 0.05 times in fiscal 2024 and fiscal 2025.

Table 1: Yinson Holdings’ ratings

Note: ^preliminary rating

Analytical contacts
Sean Lim, CFA 
(603) 3385 2550
sean@ram.com.my

Thong Mun Wai
(603) 3385 2522
munwai@ram.com.my