Malaysia: MISC Profit Down

MISC Profit Down

MISC of Malaysia, an LNG tanker operator-owner, announced its financial results for the third quarter ended 30 September.

Amidst a challenging shipping environment, MISC Group recorded operating profit of RM1.2 billion and pre-tax profit of RM863.6 million for the nine months ended 30 September from its continuing operations. Liner related business operations have been treated as discontinued operations following its cessation in June 2012.

QUARTER ON QUARTER

Group revenue from continuing operations in the current quarter ended 30 September 2012 of RM2.3 billion was 4.5% higher in comparison to the quarter ended 30 September 2011 of RM2.2 billion. Higher revenue in Heavy Engineering business from higher projects progress and development of new projects has cushioned the impact of lower revenue in the Petroleum and Chemical businesses.

The Group’s operating profit from continuing operations of RM304.5 million was 39.1% lower than RM499.6 million in the comparative quarter, primarily due to provision for higher than expected expenses of an on-going conversion project in the Heavy Engineering business.

YEAR ON YEAR

For the nine months ended 30 September 2012, Group revenue from continuing operations of RM7.1 billion was 2.7% lower than RM7.3 billion of the cumulative nine months ended 30 September 2011. Lower revenue in Petroleum and Chemical businesses from softer freight rates, lower earning days and lower number of operating vessels were the main causes of the decline in Group revenue.

Group operating profit from continuing operations of RM1.2 million in the current year was 8.0% lower than the RM1.3 million operating profit in the comparative 9-months period. Lower Group revenue and provision for higher than expected expenses of an on-going conversion project in the Heavy Engineering business have resulted in lower Group operating profit in the current year.

Inclusive of the results from discontinued operations, the Group recorded net profit of RM190.6 million as compared to RM179.9 million in the comparative 9-months period, representing a RM10.7 million increase year on year.

PROSPECTS

The shipping industry landscape continues to remain challenging amidst cautious economic sentiments globally. However, long-term contracts in LNG and Offshore businesses continue to provide stability to the Group.

Optimising cost efficiency will be a priority in the current low shipping freight rates and tonnage oversupply environment.

1 Malaysian ringgit = 0.3275 US dollars

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LNG World News Staff, November 28, 2012; Image: MISC