MISC’s 4Q18 earnings jump 397% to RM339m


MISC Bhd’s net profit jumped 396.62% to RM338.7 million in the fourth quarter ended Dec 31, 2018 (4Q18), from RM68.2 million a year ago.

In a filing to Bursa Malaysia last week, the group noted that its liquefied natural gas (LNG) sector contributed most to the quarter’s profit of up to RM186.2 million, due to lower dry-docking days and reversal of provisions for receivables.

This is followed by its petroleum sector, which posted a profit of RM108.6 million on higher freight rates.

However, MISC’s heavy engineering and other segments posted operating losses on insufficient dry-docking works, close-out of a significant project, as well as higher interest income and foreign exchange gain.

For its revenue, the group posted 3.1% lower to RM2.39 billion against RM2.47 billion in the same quarter last year due to lower revenue from its LNG and offshore segments, which recorded softer revenue on FSO (floating, storage and offloading facility) Mekar Bergading’s charter commencement in August 2018.

Meanwhile, for the year-to date results, MISC’s net profit fell 33.81% to RM1.31 billion versus RM1.98 billion due to overall lower operating profit from its LNG, offshore and other segments.

Its petroleum and heavy engineering segments posted operating losses of RM12.4 million and RM124.6 million respectively.

The group revenue was also 12.8% lower to RM8.78 billion against RM10.07 billion, on overall lower recorded revenue except for its heavy engineering segment.

Moving forward, 2019 is projected to be a challenging year for the tanker markets as much as in 2018.

The company noted that the growth in seaborne oil demand is expected to be impacted by the OPEC-led production cuts and geopolitical uncertainty.

“For the offshore segment, it will continue to be supported by healthy activities in oil and gas exploration and production.

“An increasing number of floating production system contract awards are forth coming in the next few years and MISC’s offshore business unit will be actively pursuing these opportunities.

“The two new assets added in 2018 will provide a source of income growth and support the financial performance for the unit in 2019,” MISC added.

The company also said the LNG segment will benefit from the demand growth in Asia, additional supply from liquefaction projects and slower LNG fleet growth.

However, MISC said the heavy engineering segment is not expecting more deferment by ship owners for dry-docking activities in the coming year, in view of the International Maritime Organisation implementing new rules.