Smaller fleet and lower charter rates hit MISC’s LNG revenue
Malaysian LNG shipper, MISC, on Friday reported a drop in LNG revenue for the fourth quarter and the year 2016.
For the fourth quarter, MISC reported LNG revenue of RM 558.1 million (Approx: US$125.6 million) down 25.6 percent from the RM 749.8 million in the corresponding quarter of 2015.
For the year 2016, MISC reported LNG revenue of RM 2,481.6 million (Approx: US$558.3 million), dropping 11.5 percent from 2015 LNG revenue of RM 2,805.0 million.
The company attributed the drop to operating a smaller fleet of vessels following the disposal of two vessels in November 2015 and lower charter rates earned on new contracts in the fourth quarter of 2016. However, LNG also recognized revenue from the commencement of a newly delivered vessel in the quarter under review.
Group’s profit for the year rose 10.1 percent from RM 2,535.1 million in 2015 to RM 2,793.2 million in 2016, despite the 33.5 percent drop in the fourth quarter from RM 752.4 million in 2015 to RM 499,7 million in 2016,
LNG operating profit of RM 256.4 million was 58.6 percent lower than the corresponding quarter’s profit of RM 618.9 million, mainly from lower revenue and higher depreciation by RM 52.3 million following the change in estimated useful life of vessels in January 2016.
Group’s LNG operating profit for the year of RM 1,492.9 million was 14.7 percent lower than the corresponding year’s profit of RM 1,751.0 million, however, LNG also recognized higher compensation for early termination of time charter contracts in the current year, the company said in its report.
Commenting on the current year prospect, MISC said that, on the LNG front, global LNG supply is expected to increase by 14 percent with the completion of new liquefaction plants in 2017.
However, the group expects the LNG shipping to remain sluggish despite the increase in gas supply, as the tonnage oversupply situation will continue to persist as a result of higher vessel deliveries and lower project absorption.
Still, the company does not expect its LNG business to come under pressure as its vessels are employed under long-term charters.
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