MISC Profit Up, Malaysia

MISC Group said it has delivered better than expected results for the financial year ended 31 December 2012. Despite a 4.2% revenue contraction year on year from USD3.2 billion to USD3.1 billion in the current year, the Group profit before tax from continuing operations for the twelve months ended 31 December 2012 was USD518.4 million which is 75.2% higher than the twelve months ended 31 December 2011.

The increase in profit was largely due to recognition of a one off gain following lease commencement of two floating storage units (FSU) for a LNG regasification project and realisation of 50% intercompany profit following divestment of 50% equity interest in Gumusut-Kakap Semi Floating-Production System (L) Limited (GKL) during the year. The Group also recognised lower impairment provisions of USD95.0 million in the year under review compared to USD240.5 million in the comparative period.

Group operating profit from continuing operations of USD555.9 million was 3% higher than USD539.9 million in the comparative period, primarily driven by lower operating costs, combined with the commencement of the lease for the two FSUs under the LNG regasification project.

Including USD202.8 million losses suffered from discontinued operations, the Group recorded an after tax profit for the year of USD324.6 million, a significant improvement compared to loss of USD487.0 million in the twelve months ended 31 December 2011.

QUARTER ON QUARTER

MISC Group’s revenue was relatively flat quarter on quarter, primarily due to soft freight rates in the Petroleum business.

However, in view of lower operating costs, particularly bunker and charter hire expenses, combined with commencement of the lease for the two FSUs, the Group operating profit from continuing operations was USD168.5 million which is 54.9% higher than the comparative quarter.

Group profit before tax from continuing operations saw a significant jump from USD15.6 million to USD239.8 million for the current quarter, largely due to the increase in operating profit, recognition of a one off gain from lease commencement of the two FSUs under the LNG regasification project, and realisation of 50% intercompany profit from divestment of 50% equity interest in GKL during the quarter.

PROSPECTS

Year 2013 is expected to be another tough year for the shipping industry with weak demand, volatile fuel prices and low freight rates. However, long-term contracts in LNG and Offshore businesses continue to provide stability to the Group.

[mappress]
LNG World News Staff, February 25, 2013; Image: MISC