40 YINSON HOLDINGS BERHAD LEADERSHIP MESSAGES Key features of Yinson’s project financings are as below: • Project financing loans become non-recourse to Yinson once operational, with Yinson’s guarantee released. This reduces the liquidity risk associated with these loans. • Once non-recourse, lenders are entitled to repayments only from cash flows generated by the financed projects, and not from other Yinson assets. • Project financing loans for FPSO John Agyekum Kufuor, FPSO Helang, Rising Bhadla 1 & 2 Solar Parks, Nokh Solar Park and the project bond for FPSO Anna Nery are non-recourse. The project financing loan for FPSO Maria Quitéria became non-recourse on 29 April 2025. To assess the Group’s ability to repay its loans and borrowings, the Group refers to the Adjusted Net Debt/Adjusted Core EBITDA ratio and Order book to Net Debt ratio: • The Adjusted Net Debt/Adjusted Core EBITDA ratio indicates the number of years’ profits required to cover outstanding loans and borrowings. FY2025’s ratio increased to 5.91 from 4.32 times in FY2024, as we had three major projects under construction in the current financial year. This temporary elevation is expected during the construction phase as operations have not yet commenced, but loans are being drawn to finance the construction. • The Order book to Net Debt ratio indicates the Group’s ability to service our debt using operational cash inflows. The ratio decreased to 5.30 times in FY2025, compared to 8.34 times in FY2024, reflecting increased borrowings to fund project execution. The movements in the above-mentioned ratios are manageable, as project financing loan repayments are scheduled to begin only after first oil. As the Group grows, we remain committed to optimising our financing strategy, maintaining a balance of funding from debt and equity markets to support future projects. IN THE BUSINESS OF BUILDING BUSINESSES Yinson is dedicated to creating value, with a proven track record in seeding, nurturing and scaling business ventures. Over the years, we have significantly increased the value of many of these ventures. An example is the sale of our offshore marine business, Regulus Offshore, to LFG, completed in January 2025. Starting with a single offshore support vessel in 2011, we divested the business for RM160 million, in exchange for new LFG shares. The transaction gives Yinson a minority stake and the right to a board seat in LFG, allowing continued participation to ride the strong demand cycle in the offshore support vessel (”OSV“) market, while focusing on our core energy infrastructure businesses. Another highlight is Yinson Production, which secured a USD 1 billion investment at a post-money valuation of USD 3.7 billion – one of Southeast Asia’s largest structured equity deals. Since entering offshore production in 2011 and acquiring Fred. Olsen Production AS in 2013, we have scaled Yinson Production into the world’s second-largest FPSO operator by order book. Our newer businesses are also growing. Since its inception four years ago, Yinson Renewables now has solar parks in India and Peru with over 1 GW of operational and ready-tobuild today. Similarly, chargEV, our charging infrastructure business, has received validation in the form of an investment by Khazanah Nasional. Consequently, our pay-per-use revenue has increased fivefold as of December 2024, and our charging sessions have doubled compared to the same period in the previous year. UNLOCKING VALUE THROUGH YINSON’S LARGEST EQUITY RAISE To continue to grow Yinson Production to facilitate our energy transition, a significant equity raise was necessary. To this end, Yinson Production secured a USD 1 billion investment through the issuance of RCPS and warrants from a consortium of blue-chip strategic investors, with the option to upsize to USD 1.5 billion within 24 months. These like-minded investors bring a deep understanding of infrastructure assets. In addition, this transaction helps to open access to the global capital pool, including Gulf Cooperation Council and North America. The proceeds from the transaction are primarily supporting Yinson Production’s further growth to capitalise on the strong FPSO market, while USD 200 million is directed towards expanding the Group’s renewables and green technologies businesses, as well as distributions to shareholders through share buy-backs and/or dividends. The transaction’s post-money valuation of USD 3.7 billion for Yinson Production represents a massive uplift in value – more than double the Group’s current market capitalisation. At the time of announcement, the transaction implied a 7.1 times trailing 12M-EV/EBITDA vs peers’ average of 6.5 times. The transaction was structured such that Yinson Production becomes self-funding for growth, eliminating the need for further cash calls from YHB shareholders. Shareholders benefit from improved dividends and share buy-backs, alongside operational growth in Yinson Production. Furthermore, there is no immediate dilution for YHB. Even in a post-conversion scenario, it is expected that YHB would retain the majority of an enlarged Yinson Production, which is well positioned to be the top FPSO operator globally.
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