24 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 DRIVING A JUST, ORDERLY AND EQUITABLE TRANSITION Growing global momentum is accelerating the energy transition with the new peak demand for fossil fuels estimated to take place before 2030. However, this acceleration is accompanied by a collective consensus that a just, equitable and orderly transition is critical, emphasising the importance of meeting development needs in a sustainable way to expedite progress. Conventional fossil fuels are likely to remain a significant part of the energy mix until 2050, even on a 1.5° Celsius pathway. In fact, investment in a broad energy mix, including oil & gas, is needed to ensure energy security across various economies and sectors. Through our businesses, Yinson is actively involved in providing solutions that contribute to the acceleration of the energy transition, while safeguarding energy security and affordability. We believe that the current market is favourable to the FPSO business, with strong potential to secure attractive new projects and grow further. To capitalise on these opportunities, we believe it is important to strengthen Yinson Production’s capital base and work with strategic partners that appreciate that business’s platform value. Accordingly, our FPSO business has been swinging into high gear, and will continue to do so while market conditions are right. Cash flows have been directed back into the business to ensure that our assets are efficient, low-emission, and futureproof. We are also cognisant of tail risks related to traditional energy and will factor such considerations into our decisionmaking as a Group. Thus, we made several strategic decisions that allow us to capitalise on present FPSO market opportunities, believing that this would bring about the greatest value to all our businesses over the longer term. As our businesses pursue their growth plans, our asset management business, Farosson, will supply further capital pools to invest in businesses, both internal and external, which aligns with its focus on sustainable investments. In other words, we are continually shifting gears on our various businesses according to market conditions, while making sure we stay true to our north star of advancing an inclusive transition and keeping our long-term targets within reach. One such target is to have at least 30% of equity in non-oil-based FPSO activities by 2030. We are tracking well towards that target, with RM1.0 billion invested into Yinson Renewables and Yinson GreenTech up to FYE 2024, which represented about 13% of the Group’s total equity as at 31 January 2024. Our progress towards this target over the past three years since making this commitment is depicted below. REACHING A TURNING POINT IN OUR EXPANSION JOURNEY The past three years have marked a period of intense expansion for Yinson as we took on more FPSO projects and embarked into renewables and green technologies. From a single FPSO asset under construction in the early years, we reached a peak of four FPSO projects being constructed at one point, and three currently. In the current economic climate, the Group and all our businesses are aligned to prioritise the delivery of these three projects, understanding that doing so is the key to greater and sustained future income. 2024 represents a turning point in our expansion phase. As FPSO Atlanta, FPSO Maria Quitéria and FPSO Agogo commence their charter periods over the next year or two, we believe this will transition us into a phase of stable growth, where the Group is poised to receive steady, contracted income streams for the next few decades. This is the capital that will boost our liquidity to grow across all our portfolios, while also enabling us to reward our shareholders commensurably for their continued support throughout our expansion phase. This is, by far, the biggest CAPEX cycle that Yinson has embarked on, in our history. PERCENTAGE OF EQUITY INVESTED INTO OUR GREEN BUSINESSES* Green investments Other investments FYE 2022 TARGET 2030 4% FYE 2023 9% FYE 2024 13% 30% * Represents the proportion of total equity of Yinson Renewables and Yinson GreenTech in relation to the total equity of the Group.
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