65 VALUE CREATION AT YINSON STRATEGY REVIEW As our businesses grow in tandem with the changing external landscape, we need to nimbly adapt our business models to manage risks while capitalising on the right market opportunities. To build a business that offers sustainable value to our shareholders, we will continue to improve our engagement with our investors and shareholders so they can build a good understanding of our business model and strategies while we gain better insights into their areas of concern. GS4 Tactical financial management Yinson leverages its advantage as one of the leading players in the FPSO industry to advocate for quantitative and qualitative terms that allow us to manage capital expenditure tactically, while meeting our clients’ need for timely, quality delivery. One example is the FPSO Atlanta project, which involves Yinson receiving milestone payments during construction and a call option for Yinson to acquire the asset-owning company which holds a 15-year time charter and operations & maintenance contract. In the FPSO Agogo project, Yinson signed an Agreement for Preliminary Activities (“APA”) which brought in upfront milestone payments, reducing the need for fresh capital outlay during construction. These strategies benefit both Yinson and our clients, allowing us to maintain financial resources for operational excellence and timely project delivery while upholding value creation for stakeholders. Yinson also raises cash from the equity market and through other financial instruments to fund our projects by collaborating with a network of banks that are actively involved in energy infrastructure financing. In this context, we also leverage on newer types of financial instruments that are aligned with our ESG aspirations. This led to Yinson issuing Malaysia’s first Sustainability-linked Sukuk Wakalah Programme in 2021, valued at RM1 billion for a five-year tenor and which was oversubscribed by 1.66 times. In the green technologies space, we take a collaborative approach, by partnering for co-investments or co-developments of new technologies or innovations. Co-investments include equity investments into technology start-ups whose offerings contribute to our particular areas of focus, such as Shift Clean Energy for marine battery storage solutions and with SMRT Ventures into autonomous vehicle technology start-up, MooVita. Co-developments include our contribution to various research projects, such as with the National University of Singapore on the development of autonomous technology for buses and with the Goal Zero Consortium for the development of electric vessels. This approach allows us to access technologies that enhance our green assets and facilitates integration across the land and sea transport ecosystems, multiplying the value of the business over time. Sourcing and strategising capital allocation for our businesses’ growth amid an increasingly climate-conscious market environment is one of the challenges that Yinson will face moving forward. However, we will continue to build on the long-standing trust that we have with the investor community through prudent financial management, explore new capital pools and financing opportunities and continuously improve our sustainability performance as our strategy to turn these challenges into opportunities. GS5 Build a platform for growth The findings from the GSR have provided impetus to this particular strategy, as one of the immediate outcomes centred on building a more agile Yinson by enabling our business units to grow and scale while managing the unique challenges and opportunities within their respective industries. Thus, transferring decision-making autonomy to the business units was a key achievement that will enhance this strategy and enable our business units to be nimbler. Furthermore, we have decentralised some corporate functions to the business units, such as tax, treasury and finance, legal and corporate finance, allowing specialised corporate expertise to contribute to stronger, more efficient decisions. Accordingly, we also brought in new talent to join business unit senior leadership teams, including new CFOs for YP, YR and YGT – Mr Markus Wenker, Mr Christian Rykke and Ms Chan Wan Yin, respectively. At the Group level, we continue to strengthen our governance structures and have put in place strategies that will optimise functions like tax and capital allocation, risk management and HR. Where possible, we are leveraging the synergies present in the Group while the centre provides overall leadership and governance in sustainability and risk for the business units. There are always challenges that come with growth, such as ineffective operations, finding and retaining quality talent and maintaining an aligned corporate culture. Our Core Values, R.O.A.D.S, continue to be reinforced and operationalised at all levels, aligning our hearts and actions towards achieving our Vision and Mission. We believe that the best way to manage risks that come with rapid growth is by cultivating a passionate workforce which understands that the work that it does contributes to addressing the critical issue of global energy security.
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