Highlights

• 1HFY27 profit on ER basis by its FPSO subsidiary. YP reveals new information, namely: a) an estimated US$10m one-off financing costs for the early repayment of Agogo junior loan of US$383m, b) US$3m one-off incentive bonus for FPSO AN, and c) FPSO MQ weakened slightly by pending charter payment by Petrobras.
   
• Operations on track, with active debt repayment ongoing, as shown in the successful refinancing of FPSO Agogo into a US$1.5b project bond. The Agogo project bond carries a lower coupon of 6.5% vs the other two bonds for Brazil FPSOs (8.5-8.9%). Potentially, two more new FPSOs may be secured. While our EBITDA forecasts are aligned, the ER depreciation was nearly 3-4x of IFRS equivalent, hence we cut our profit forecasts by up to 49%. Depreciation adjustment does not impact our valuation.
   
• Retain BUY; target price: RM2.40.

Analysis

• 1HFY27 core profit recomputed on ER basis. The FPSO subsidiary Yinson Production (YP) released 2QFY27 accounts and investor presentation last week. Alongside new Enterprise Reporting (ER) disclosure, we found additional information namely: a) one-off financing costs for the early repayment of Agogo junior loan of US$383m, which we estimated to be US$10m; b) FPSO Anna Nery (AN) had a one-off incentive bonus for a planned performance was affected slightly by pending charter payment by Petrobras.