[RAM] RAM Ratings affirms Yinson's A1 senior ratings and A3 perpetual programme rating
RAM Ratings has affirmed Yinson Holdings Berhad's (Yinson or the Group) A1/Stable/P1 corporate credit ratings (CCRs) and the A1/Stable rating of its Islamic Medium-Term Notes Programme of up to RM1.0 bil. We have also affirmed the A3/Stable rating of the Group's Subordinated Perpetual Islamic Notes Programme of up to RM1.0 bil, reflecting its subordinated position and the risk of deferrable profit distributions.
The affirmations are based on our expectations that Yinson's credit metrics will stay supportive of the ratings, given the long-term revenue and cashflow visibility. This is anchored by its robust total outstanding order book of USD20.6 bil as at end-April 2025. Yinson remains one of the largest independent providers of floating production systems (FPS) globally, backed by a track record of prompt vessel delivery and high technical uptime – key factors that enhance its competitiveness in future tenders. Its comprehensive risk management further mitigates execution and construction risks inherent to the sector.
Operationally, Yinson's two new floating production, storage and offloading (FPSO) vessels – Atlanta and Maria Quiteria – were completed in FY Jan 2025 and are both contributing to earnings after having achieved first oil by end-2024. Agogo FPSO, completed earlier this year slightly below budget, reached first oil on 29 July 2025, four months ahead of schedule.
The Group's top line declined a respective 35% and 44% in FY Jan 2025 and 1Q FY Jan 2026 as revenue related to the construction progress of these vessels decreased. More importantly, the Group's adjusted operating profit before depreciation, interest and tax under enterprise reporting leapt 41% to RM1.9 bil in FY Jan 2025, before rising another 39% in 1Q FY Jan 2026. This performance reflects full-year contribution from FPSO Anna Nery and the operational commencement of Atlanta and Maria Quiteria. RAM views enterprise reporting – which treats all lease contracts as operating leases and proportionately consolidates Yinson's ownership of each asset – as a better reflection of the Group's financial performance, and more aligned to RAM's analytical adjustments. Our approach focuses on Yinson's adjusted operating cashflow (OCF) derived from the Group's share of total project earnings post-project debt servicing.
Yinson's debt level rose slightly to RM18.6 bil by end-April 2025 (end-January 2024: RM18.2 bil) to fund project execution. Share buybacks reduced its equity base, pushing gearing from 2.95 times to 3.35 times. Excluding non-recourse debts though, Yinson's adjusted debt was lower at RM8.7 bil from RM12 bil the year before, with adjusted gearing and net gearing ratios improving to 1.58 times and 1.12 times, respectively (end-January 2024: 1.93 times and 1.44 times). Overall debt was lower than our forecast, which had assumed one new FPSO vessel that has yet to materialise.
Looking ahead, we expect adjusted debts to increase to RM12 bil-RM12.5 bil in the next one to two years to progressively fund up to two new FPSOs, as guided by management. Adjusted gearing will stay manageable at 1.20 times to 1.50 times, supported by a larger equity base. Adjusted OCF debt coverage is anticipated to hover at 0.06 times-0.09 times (FY Jan 2025: 0.07 times), commensurate with the Group's current ratings.
Analytical contacts
Karin Koh, CFA
(603) 2708 8237
karin@ram.com.my
Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my