54 YINSON HOLDINGS BERHAD VALUE CREATION AT YINSON TRADE-OFFS Yinson balances the demands of our six Capitals with our resources. By aligning our investments with our priorities and upholding our governance processes, we reconcile the complexities of short-term demands and long-term goals. This integrated approach supports our day-to-day operations and positions us for sustained growth. TRADE-OFFS HOW WE MANAGE THE TRADE-OFFS Financial Capital Maintaining financial stability is critical for resilience and adaptability to a constantly shifting external environment. Yinson optimises its capital structure to enable sustainable growth, which may limit immediate investments in Manufactured, Intellectual and Human Capitals. Yinson builds a stable order book and strong counterparties, ensuring strong cash flow. We practise disciplined financial management and capital allocation, while optimising our capital structure and diversifying financing activities, including bonds. Establishing Yinson Production as a top FPSO provider and operator globally, and Yinson Renewables and Yinson GreenTech as our next engines of growth, allows Yinson to balance financial stability with future expansion. Manufactured Capital Yinson is concentrating on our core business areas and strategic priorities. We have been more selective in project development and streamlining our delivery capacity. While this realignment strengthens our long-term position, it may limit our Financial Capital, potentially affecting shareholder returns, employee rewards and partnerships. Yinson takes a risk-balanced and measured approach. We prioritise projects that deliver sustainable returns over the long-term, carefully selecting and developing assets that maximise value and align with our strategic focus. This enables Yinson to maintain a strong market presence while carefully scaling our Manufactured Capital. Intellectual Capital Investing in R&D for green technologies, improving corporate governance, and implementing novel technologies like carbon capture and digitalisation adds to Yinson’s Intellectual Capital. However, they require substantial investment from Financial and Human Capitals, which could be directed to other immediate business needs. Yinson carefully reviews and prioritises our Intellectual Capital investments, focusing on initiatives that deliver long-term value, efficiency and strategic alignment. Through platforms like our Group IT Strategic Roadmap, ERM framework, Advisory Boards and ESG Taskforce, we ensure that these investments are purposeful and aligned with our strategies. Human Capital The focus on upskilling and retaining Yinson’s workforce, such as in training, learning and development and health and well-being programmes, can temporarily impact our Financial Capital. This may lead to under-investment in other areas and a misalignment of priorities. Yinson focuses on targeted upskilling and retention programmes that support long-term goals. Investing in learning and development helps employees gain skills needed for changing industry demands. Yinson encourages continuous improvement and employee engagement. This approach balances the short-term cost of training with the long-term benefit of a skilled and adaptable workforce. Social & Relationship Capital Robust stakeholder engagement and extensive ESG initiatives may divert resources from Manufactured and Intellectual Capitals. Community outreach, supplier collaborations and DEI programmes may impact short-term operational efficiency and strain resources in other business areas. By actively engaging stakeholders, Yinson cultivates strong, trust-based relationships that support long-term collaboration. Encouraging stakeholder involvement in the energy transition and promoting DEI strengthens our Social & Relationship Capital and fosters a more resilient and inclusive business environment. The long-term advantages of these initiatives outweigh the short-term challenges of resource allocation. Natural Capital As an oil & gas equipment and service provider, Yinson’s operations have an inherent impact on Natural Capital, particularly with the energy consumption and emissions. This creates a challenge in meeting short-term Climate Goals while continuing to operate and deliver projects. The environmental impact may also deter investors, posing a risk to Financial Capital, while potentially leading to reputational damage and loss of community trust, affecting Social & Relationship Capital. Yinson supports the global energy transition by investing in Yinson Renewables and Yinson GreenTech, which we regard as our next engines of growth. Concurrently, we are reducing our fleet emissions intensity and embarking into low-carbon ventures. We commit to the highest environmental standards, aligned with global benchmarks. This balanced approach helps us manage our environmental impact while strengthening the resilience of our Social & Relationship and Financial Capitals.
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