Yinson Annual Report 2021

24 YINSON HOLDINGS BERHAD SECTION 01 : OVERVIEW Going forward, we will continue to build up a diversified energy asset portfolio and tap into potential synergies between our businesses. We believe that the synergies between our Business Divisions can be leveraged upon to create distinctive opportunities for growth and expansion. Additionally, the synergies can generate significant efficiencies across the business through shared resources, knowledge and experience. Some examples of current and planned synergies that exist between our Business Divisions are captured in the graphic on page 21, and elaborated in more detail within this Report. TACTICAL FINANCIAL MANAGEMENT The nature of our business is capital intensive, which is why tactical financial management is paramount to our continued success. Counterparty strength is an important consideration for the long-term contracts that we enter into. We seek to conduct our business with reputable clients, which allows us to limit counterparty risk. The majority of our clients are investment grade or large national oil companies, which provides assurance to investors and lenders that the risk of credit default is low, even during periods of economic volatility MANAGEMENT DISCUSSION & ANALYSIS such as was experienced in FYE 2021. For counterparties that have yet to achieve investment ratings, Yinson manages credit exposure by negotiating upfront milestone payments of construction costs from the client. For example, for FPSO Abigail-Joseph, we took on minimal credit exposure as this was a redeployment project where our donor FPSO was already free from any encumbrances, and given that the client was a smaller independent oil company, we also negotiated for upfront milestone payments for the project conversion cost. Applying such a strategy allowed us to better manage our credit exposures and obtain an order book of USD769 million for 15 years (firm+options) with minimal fresh capital outlay. At Yinson, we adopt a broad-based management approach with our business, corporate and financing partners, whom we work closely with to manage our financial requirements. We build strong partnerships where we are able to co- invest with our partners into projects and draw on each other’s strengths for greater overall project returns. We also continuously grow and maintain strong relationships with our lender group and potential investors. The oversubscribed USD400 million FPSO Anna Nery bridge loan executed in the midst of a global lockdown is a clear statement of lender confidence. YINSON’S TRANSFORMATIONAL PHASES h We paid RM700 million in shareholder returns (dividends and share buy backs) between FYE 2011 and FYE 2021. h On a cumulative basis between FYE 2011 and FYE 2021, we paid 54.85 sen per share or RM525 million in total. h Of this amount, 18.6 sen per share, or RM203 million related to special dividends which were paid out subsequent to major divestment or monetisation of assets by the Group. 1983 - 2010 TRANSPORT AND LOGISTICS 2011 - 2013 OFFSHORE PRODUCTION 2014 - 2018 FULL-SCALE EXECUTION AND SERVICE FPSO PROVIDER 2019 to present ENERGY INFRASTRUCTURE AND TECHNOLOGY COMPANY Began as a transport agency in Johor Bahru, Malaysia. Grew to become one of Malaysia’s largest transport companies Ventured into offshore production through a JV with PTSC Vietnam to build an FPSO and an FSO Acquired Fred. Olsen Production ASA and divested non-oil & gas subsidiaries. Increased fleet size to become 6 th largest independent FPSO leasing company globally Established Renewables and Green Technologies Divisions. Ventured into new territories for Offshore Production. Established strategic collaborations for Offshore Marine About Yinson, pg 27; Financial Capital, pg 82