Malaysia’s MISC post lower revenue

Malaysian LNG shipping giant MISC, a unit of Petronas, said its revenue for the fourth quarter and full year 2018, both decreased over the corresponding periods in 2017. 

Group revenue for the fourth quarter of 2018 of 2.28 billion Malaysian ringgit ($587.26 million) was 3.1 percent lower than the 2017 corresponding quarter’s revenue of 2.46 billion.

The decrease in the company’s revenue was mainly from the LNG segment due to lower earning days following a commercial agreement with a client to temporarily suspend a charter contract due to the geopolitical situation to which the charter will be resumed in the future and to be compensated with a longer contract period, the shipper said.

Revenue for the full year 2018 reached 8.78 billion Malaysian ringgit ($2.15 billion), 12.8 percent below the 10 billion Malaysian ringgit recorded in 2017.

In its report, MISC said all segments except for Heavy Engineering recorded lower revenues.

LNG segment experienced a reduced number of operating vessels following the expiry of a charter contract in June 2017 and suspension of a charter contract due to geopolitical situation in the current year together with lower charter rate following contact renewal of an LNG carrier in October 2017.

Still, the LNG and Petroleum segments recorded higher operating profit with lower dry-docking days.

However, going forward, the company said it expects the LNG segment to benefit from the market strength seen in 2018, supported by demand growth in Asia, additional supply from new liquefaction projects and slower LNG fleet growth in 2019.

While the LNG spot rates reached a multi-year peak in late 2018, the sustainability of such rates remains uncertain in 2019. Nevertheless, the existing portfolio of long term charters that are in place will underwrite a steady performance for MISC’s LNG shipping unit into the next financial year.