Malaysian LNG shipping giant MISC, a unit of Petronas, said on Tuesday its liquefied natural gas business logged an 18.4 percent decrease in revenue in the second quarter.
MISC’s LNG fleet earned 595.9 million ringgit ($145.9m) in the quarter that ended June 30 as compared to 730 million ringgit in the second quarter of 2017.
MISC attributed the drop mainly due to “reduced number of operating vessels and a lower charter rate for the contract renewal of an LNG carrier in October 2017.”
Operating profit of 274.6 million ringgit halved as compared to the corresponding quarter’s profit of 557.7 million ringgit which included recognition of compensation for early termination of a time charter contract, according to MISC’s statement.
For the January-June period, MISC’s LNG fleet earned 1.18 billion ringgit, down 20 percent year-on-year.
LNG operating profit for the six-month period was at 549.8 million ringgit, 38.1 percent lower than the corresponding period’s profit of 887.7 million ringgit.
Spot LNG rising
MISC noted in its financial report that the current spot rates in the LNG shipping sector were rising gradually on the back of improved chartering activities.
“International LNG trade has continued to thrive from both a supply and demand perspective, mainly driven by demand growth from strong enforcement of coal-to-gas switching policies in China and expected new and/or ramping of LNG supplies from the Atlantic during second half of 2018,” the shipping company said.
MISC added that, despite the tonnage oversupply situation in the spot market, indicators were positive for further improvements through the rest of the year.
“Nevertheless, our present portfolio of long term charters will provide stable income and cashflow to the group’s LNG business segment,” it said.