62 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 Our newly established business unit, Farosson, led by Mr Daniel Bong, acts as a catalyst for growth, offering collaborative capital solutions that drive success, maximise returns, and foster a sustainable future. With a focus on advisory, investment and asset management, Farosson offers a robust platform for capital recycling, enabling businesses to unlock the value of their long life assets and optimise resources for enhanced returns. Farosson’s expertise lies in sourcing the right capital and investors tailored to the unique requirements and circumstances of Yinson’s businesses. This will ensure a stable capital base that supports our Group’s growth initiatives. Armed with hands-on investing experience accumulated over the years, Farosson will also invest in external sustainable infrastructure projects, reinforcing our Group’s dedication to environmental stewardship and expanding our impact in the broader community. A DEEPER DIVE Through the GSR, we had the opportunity to take a deeper dive into each of our businesses to determine what our next steps should be in the context of their respective operating environments, while considering capital, technological and human capital demands. YP Yinson Production The FPSO business remains Yinson’s main profit centre in the near to medium term and will require significant capex to grow. With the energy sector entering a capex expansion era, we believe that YP is well positioned to capitalise on this while contributing significantly to the net zero agenda given our competitive advantages such as strong relationships, project execution, operational track record and a leading position in decarbonisation efforts. Yinson will also continue to pursue its multi-client portfolio to ensure business sustainability. Separately, the FPSO business also conducted a strategy review which led to an internal reorganisation that streamlined and housed all FPSO activities under YP. This strengthens its balance sheet to tap into future growth and expansion. This exercise also prepares the FPSO business to take advantage of market opportunities as and when they present themselves. As part of the FPSO strategic review, Yinson decided not to pursue an Initial Public Offering of the FPSO business at this stage, considering the prevailing macroeconomic developments and factors which would not be favourable towards maximising shareholder value presently. Nonetheless, we continue to explore various other opportunities and options, including strategic partnerships, from time to time. STRATEGY REVIEW YR Yinson Renewables Our Renewables business has its finger on the pulse of the energy transition, showing significant opportunity to scale. Capital recycling has always been an integral part of YR’s growth strategy. We will strategically evaluate options to sell down renewables projects, which may include an asset-by-asset or a portfolio aggregation approach. We will also strategically plan the right timing to sell down, cognisant that each phase of the asset’s value chain presents different risk, return and cost profiles. YR will continue to diligently assess project opportunities, correlating returns to each project’s risk factors, such as the counterparty, contractual legal terms, technical requirements, tax, ESG, project partners and strategic considerations. The evaluation process, led by our experienced team and local partners, helps us to balance commercial expectations with our strategic goal of achieving sustainable growth. We believe that our current and future pipeline holds significant value. In time, we believe that we will be able to strategically monetise the pipeline, bringing sustained returns both to the Group and our shareholders. YGT Yinson GreenTech Our green technologies business fits in well with Yinson’s vision and climate goals, and provides a good balance to the Group’s overall risk return profile in line with the energy transition. The findings from the GSR affirmed that YGT is involved in spaces that are key value drivers in the decarbonisation economy. Having invested in various technology companies in the early stages of YGT’s growth, in 2022 we directed our focus to the strategic areas that we should build and scale. The heart of YGT’s business is electrification across the land and sea transport systems, and we are working hard to strategically enhance and integrate our various service offerings towards creating this future ecosystem for disruptive growth. We believe these efforts have not yet been reflected in the valuation of the Group, and will therefore bring significant upside to our shareholders in the future. STEADY PROGRESS AGAINST OUR GROUP STRATEGIES Throughout the period under review, we continued to be guided by our six Group Strategies (GS1 to GS6). Below, we describe how adhering closely to the strategies has brought us closer to achieving our purpose.
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