57 INTEGRATED ANNUAL REPORT 2025 VALUE CREATION AT YINSON | RISKS AND OPPORTUNITIES Project execution risk Definition and impact of the risk on Yinson Project execution risk stems from the complexity, scale and interdependencies of Yinson’s major projects particularly in the FPSO segment as well as renewables and green technologies ventures. Delays, scope changes, budget overruns or regulatory challenges during project execution can significantly impact profitability, contractual obligations and stakeholder confidence. These risks are particularly critical during the construction phase, where external disruptions such as supply chain volatility and price fluctuations may occur. How we manage or mitigate the risk • Held regular engagements between Group Finance and project teams to track costs and review progress. • Presented project status and key risks to the Advisory Boards of the respective businesses. • Applied fixed prices for raw materials, where applicable, to manage cost exposure. • Implemented strong procurement policies to support effective vendor selection and logistics coordination. • Conducted thorough vendor screening and compliance checks using risk management platforms. • Strengthened oversight through improved working-level communication within the Group. Moving forward (opportunities) • With a foundation of successful project delivery, we have the opportunity to strategically evolve our execution approach to sustain and scale excellence across future projects. • Apply key learnings to new geographies and project types to streamline operations and strengthen delivery assurance. • Strengthen partnerships, enhance cost control strategies and invest in execution-related technologies to improve agility and responsiveness. Energy transition risk Definition and impact of the risk on Yinson Energy transition risk refers to the potential impacts on Yinson’s financial performance, operations and strategic objectives arising from global shifts towards renewable and low-carbon energy solutions. This risk is influenced by regulatory shifts, climate policies, investor expectations and technological advancement. While strong global climate ambitions have historically heightened this risk, recent developments, including the withdrawal of key institutions from climate alliances and the reevaluation of decarbonisation timelines by major oil & gas companies, indicate reduced external pressure for rapid transition, prompting a reassessment of the risk’s criticality. How we manage or mitigate the risk • Expanded and grew Yinson’s renewables and green technologies businesses. • Piloted Internal Carbon Pricing. • Established Yinson's Climate Goals and revised Yinson Climate Roadmap. • Operationalised carbon abatement strategies for carbon-intensive assets. • Implemented ESG IT tools. • Obtained third-party assurance on carbon performance. • Achieved continuous improvement in ESG ratings from Sustainalytics, MSCI and FTSE4Good. Moving forward (opportunities) • Evolving energy market sentiments provide Yinson with greater strategic flexibility. With reduced short-term pressure for rapid decarbonisation, focus can be placed on developing resilient and scalable low-carbon solutions. • Invest in carbon management technologies to further diversify revenue streams toward green segments.
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