Yinson Annual Report 2021

94 YINSON HOLDINGS BERHAD SECTION 05 : OUR CAPITALS FINANCIAL CAPITAL GEARING RATIOS (TIMES) FYE 2021 1.52 0.78 FYE 2019 0.87 0.16 FYE 2020 1.01 0.40 Based on total borrowings excluding non-recourse borrowings Based on total borrowings NET GEARING RATIOS (TIMES) FYE 2021 FYE 2019 FYE 2020 1.01 0.63 0.51 0.27 0.01 (0.19) Based on total borrowings excluding non-recourse borrowings Based on total borrowings FYE 2021 FYE 2020 FYE 2019 FYE 2018 FYE 2017 4,102 2,475 1,854 2,242 3,136 Adjusted Net Debt (RM MILLION) FYE 2021 FYE 2020 FYE 2019 FYE 2018 FYE 2017 2.68 2.86 2.07 2.73 5.89 Adjusted Net Debt / Adjusted Core EBITDA (TIMES) The Group applies Net Gearing Ratio (calculated as ‘Total Loans and Borrowings’ less ‘Cash and Bank Balances plus liquid investments’ divided by ‘Total Equity’) as a key indicator to manage its operation funding structure. This ratio increased to 1.01 times in FYE 2021 in tandem with the progressive execution of the FPSO Anna Nery project and upsized refinancing exercise of FPSO JAK. This ratio will continue trending upwards until the beginning of 2023, when FPSO Anna Nery is expected to commence its 25-year lease tenure. Although Net Gearing Ratio has increased, debt levels remain manageable. As at 31 January 2021, RM3,919 million of loans and borrowings are project financing loans for FPSO JAK and FPSO Helang, which are structured to ensure smooth repayment over the course of the firm charter period. Project financing loans are non-recourse to Yinson once operational with Yinson's guarantee being released from the project financing loan, which minimises the risk of these loans to Yinson’s liquidity. The project financing lenders are only entitled to repayment from cash flows of the projects the loan is financing, and not from any other assets of Yinson. As at the issuance date of this Report, the project financing loans for FPSO JAK and FPSO Helang are non-recourse, where the project financing loan for FPSO Helang became non-recourse on 3 February 2021. Had the project financing loan for FPSO Helang become non-recourse on 31 January 2021, the Group's Gearing ratio and Net Gearing ratio would have been 0.54 times and 0.03 times respectively.