Malaysian MISC's 3Q Profit Down
Malaysian shipping firm MISC Group, a unit of state-owned Petronas, November 19 said its net profit for the three months to September 30 (3Q 2018) halved year-on-year thanks to lower contribution from the LNG and offshore divisions.
Company’s net profit during the quarter was ringgit 341mn ($81.24mn) as against ringgit 680.5mn in the corresponding quarter of previous year, a drop of 49.8%. Revenue during the quarter was ringgit 2.23bn, down 3.7% year-on-year.
Operating profit of MISC’s LNG division in 3Q was ringgit 249.4mn, down 38.1% year-on-year. The company attributed this to lower revenue coupled with one-time reimbursement from charterer in the corresponding quarter. LNG division’s revenue was down 15% year-on-year to ringgit 603.5mn.
Offshore division saw a sharp drop in operating profit during the quarter as well. It stood at ringgit 139.9mn, down 55.3% year-on-year while revenue was down 15.6% year-on-year to ringgit 337.3mn, MISC said.
As for the group’s prospects, MISC said in the immediate term, the petroleum tanker market looks forward to a rise in seasonal demand during the upcoming winter months. Slowing newbuilding orderbook and continued scrapping of older tankers are additional immediate term support factors, it said, adding that over the longer term, growth in tonne-miles that is driven by rising movement of oil from the Atlantic region to Asia suggests a more robust outlook in charter rates.
MISC said that LNG spot rates rose to a peak in 3Q 2018, after a lacklustre start for the year, fuelled by higher than expected Chinese imports. It added that LNG shipping unit will take advantage of the buoyant market conditions to lock-in higher charter rates for two to three of its vessels which are presently in the spot market. “Nevertheless, the operating income of the larger and core LNG fleet continues to be underwritten by the portfolio of long-term charters that are in place,” MISC said.
The outlook for the offshore segment continues to be positive, MISC said, supported by healthy activities in oil and gas exploration and production. “A growing number of floating production system contracts are expected to be awarded over the coming years. MISC’s offshore business unit will be actively pursuing these opportunities,” it said.