BY SHARIDAN M ALI
PETALING JAYA: MISC Bhd’s net profit for the second quarter ended June 30 dipped 20.8% to RM300.9mil, mainly due to higher operating losses in its petroleum business.
“In addition, in the previous corresponding quarter, the group had recognised a one-off settlement received from the early re-delivery of vessels on time charter contracts,” the energy shipping giant said in a statement yesterday.
The profit for the quarter was achieved on an RM2.28bil revenue, which was marginally lower than last year’s RM2.35bil.
“The decrease in group revenue is mainly attributed to lower revenue in heavy engineering from slower progress in certain projects as well as lower revenue in the petroleum business from softer freight rates and a weak market.
“Meanwhile, higher revenue in the liquefied natural gas (LNG) business, following the commencement of two floating storage units (FSUs) in August 2012, and the chemical business from higher freight rates helped to soften the decline in group revenue,” said MISC, which derived its heavy engineering earnings from its 66.5% stake in Malaysia Marine and Heavy Engineering Holdings Bhd.
MISC’s net profit of RM601.3mil for the six-month period, however, was a huge jump from its net loss of RM89.7mil last year.
“The increase in profit was mainly due to a net impairment reversal of RM25.5mil in the current year compared with an impairment charge of RM159.7mil in the corresponding period,” it said.
Meanwhile, revenue for the period stood at RM4.66bil, a tad higher than 2012’s RM4.56bil.
“The increase in group revenue was primarily due to the higher revenue in the LNG business following the lease commencement of two FSUs in August 2012, the heavy engineering business from the commencement of new projects, and the chemical business from higher freight rates,” it added.
However, MISC explained that the lower revenue in the petroleum segment from a smaller fleet of operating vessels and softer freight rates had negated the revenue increase in the LNG and heavy engineering businesses.
MISC, a subsidiary of national oil company Petroliam Nasional Bhd (Petronas), was in the news recently due to a decision by the latter to procure its own LNG vessels directly, which received unfavourable feedback from analysts.
However, Petronas will engage MISC to provide project management and technical consultancy services for the construction of the new LNG ships.
Nevertheless, StarBizWeek had reported, quoting industry sources, that it would be likely that Petronas would have to rely on MISC to operate the vessels at a fee.
Going forward, MISC expects another challenging year for the shipping industry in 2013, with soft demand growth, volatile fuel prices and excess shipping capacity.
“However, long-term contracts in the LNG and offshore businesses continue to provide stability to the group,” it said.
Publish date: 17/08/13