Malaysian MISC Reports Drop in Q2 Profit

Malaysian shipowner MISC, a unit of state-run Petronas, on August 13 said profit attributable to equity holders of the company was down by 25% yr/yr in the three months to June 30 (Q2) owing to impairment loss on its heavy engineering asset.

The company’s profit was ringgit 299.5mn ($71.4mn) compared with ringgit 399.8mn in the same period of last year. Revenue during Q2 was up 1.1% yr/yr to ringgit 2.19bn owing to higher contributions from petroleum segment following improved freight rates and higher earnings in the LNG segment.

Looking ahead, the company expects LNG spot charter rates to remain soft as Covid-19 continues to dampen LNG demand resulting in cargo cancellations and output cuts by producers. “This is expected to persist in the coming quarter as the market enters the seasonal low-demand period. Nevertheless, this will have limited impact on the steady performance of the group’s LNG business segment as the majority of its vessels are under long-term charters,” it said.

On the petroleum market, MISC said that with the global economy expected to take some time to recover to pre-pandemic levels and with a large oil inventory overhang yet to be cleared, freight rates will likely remain under pressure for the remainder of the year.

“Nevertheless, the petroleum shipping segment will continue to focus on building secured income through the expansion of its niche shuttle tanker business and rejuvenation of its VLCC [very large crude carriers] fleet with eco-friendly LNG dual fuel systems to mitigate any weaknesses in the spot market,” MISC said.