Malaysia: MISC Posts 2Q Results
MISC of Malaysia has returned to profitability after two consecutive quarters of losses with its second quarter net profit of RM436.7 million.
The Group had recorded losses in the last two quarters arising from provisions made in respect of the Group’s planned cessation of its Liner related business.
Following the cessation of the Group’s Liner related business operations as of June 2012, Liner related business has been classified as “discontinued operations” in the Group’s results announcement for the half year ended 30 June 2012.
QUARTER ON QUARTER
Group revenue from continuing operations of RM2.48 billion has declined slightly by about 4.0% in the second quarter ended 30 June 2012 in comparison to the quarter ended 30 June 2011. This was largely attributed to lower earning days and freight rates in the Chemical and Petroleum businesses.
However, Group profit before tax from continuing operations has increased to RM458.5 million from RM379.6 million in the comparative quarter driven mainly by higher contributions from the Offshore and Tank Terminal businesses. In addition, one-off settlement arising from early redelivery of vessels on time charter contracts has also lowered the losses in the Petroleum business.
Including the results from liner related business operations (discontinued operations), net profit for the quarter was RM436.7 million compared to RM189.9 million in the comparative quarter. As the Group exited the Liner related business, it recorded lower losses in this segment in the current quarter.
YEAR ON YEAR
For the first half of 2012, Group revenue from continuing operations of RM4.79 billion was 6.1% lower than the first 6 months of 2011. Lower revenue in Heavy Engineering business and softer petroleum freight rates were the main contributors to the decline in Group revenue.
Despite lower revenue, Group profit before tax from continuing operations for the first half of 2012 was RM622.4 million compared to RM393.8 million in the first 6 months of 2011. This was largely attributed to higher profits in Offshore and Tank Terminal businesses and lower losses in Petroleum business.
Including the results from discontinued operations, the Group recorded net profit of RM26.9 million as compared to a net loss of RM20.1 million in the comparative period, representing a RM47.0 million increase year on year.
The shipping industry has not shown signs of recovery. Vessel overcapacity continue to put petroleum and chemical freight rates under pressure over the short to medium term. However, long-term contracts in LNG and Offshore businesses will continue to cushion the Group from fluctuations in the petroleum and chemical trades.
1 Malaysian ringgit = 0.320277 U.S. dollars
LNG World News Staff, August 16, 2012