Although it has reported good results this quarter and for the year-to-date, Yinson Holdings is still concerned about the near term outlook for the oil and gas (O&G) industry.
Commencement of a new charter contract and a stronger US Dollar helped boost Yinson’s net profit for the third quarter ended Oct 31, 2017 45% to MYR91.2m ($22.4m) from MYR63.1m previously.
The Malaysia-based floating production, storage and offloading (FPSO) vessel specialist said revenue rose to MYR263.1m from MYR128.0m for the quarter.
Year-to-date segment revenue from the key marine segment spiked 82% to MYR651.8m from RM357.6m in the previous corresponding period.
Yinson attributed the increase mainly to higher marine business with the chartering commencement of the FPSO John Agyekum Kufuor (FPSO JAK) in June and the stronger US Dollar, which resulted in higher revenue on conversion to Malaysian Ringgit.
Segment pre-tax profits more than doubled to MYR324.9m from MYR132.6m previously mainly due to better profit contribution from the higher recorded revenue and lower impairment loss on trade and other receivables but offset by impairment charges on property, plant & equipment
“The short-term to medium-term outlook in the oil and gas sector remains challenging and uncertain due to protracted oversupply, emerging new alternative energy resources and financial institutions risk appetite towards the sector. Overall global economic conditions remain challenging, with higher downside risks,” Yinson said in assessing the current conditions.
Looking ahead, it warned that “global economic activity is expected to remain subdued despite unprecedented easing of monetary conditions in major economies”.
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