by SHAHEERA AZNAM SHAH / pic by MUHD AMIN NAHARUL
MISC Bhd eyes to win projects worth up to US$3 billion (RM12.4 billion) this year, higher than US$1 billion worth of jobs clinched last year.
MISC president and group CEO Yee Yang Chien (picture) said in the first quarter of 2019 (1Q19), the firm bid for projects worth RM6 billion, equivalent to the bids submitted in the entire last year.
“In 1Q19 alone, we were looking at US$6 billion worth of contracts (bidding), the same value we saw in 2018, so there is no question of running out of opportunities in the market.
“Now we are working on three to four bids, which we have the capacity to secure between US$2 billion and US$3 billion.
“We have to be very stringent in the risk assessment and see whether we can execute and deliver those projects,” he told reporters after MISC’s AGM yesterday.
Yee said last year the firm won projects worth RM1 billion, or a 20% success rate from the RM6 billion biddings submitted in 2018.
“Compared to 2017, we only managed to secure 14% of the total projects we bid that year,” he said.
Moving forward, Yee said the firm expects a 20% jump in its operating cashflow from 2018, contributed by the realised jobs secured since 2018.
“In 2020, we are looking at an about 20% jump in our operating cashflow compared to 2018.
“For 2020, we are going to have a big chunk of contributions from the list of assets secured, mainly the five shuttle tankers and the floating, storage and offloading projects which will be commissioned in 2020,” he said.
On its liquefied natural gas (LNG) shipping division, Yee said the market is expected to be pressured by the oversupply of expiring vessels, but will be mitigated by the stabilised charter rates.
“The LNG shipping market has been grappling with a lot of vessels without charter for the past three years and it continues into 2019, coupled with expiring vessels.
“Older vessels, which are on longterm charters, are all expiring and coming into the market this year.
He added that the charter rates for energy shipping bottomed in 2018 and do not expect to sink further.
“Our financial for the division last year was loss-making, but the cashflow was much healthier than 2011,” he said.
The time-charter rate for LNG shipping dropped to about US$70,000 per day in the first half of 2018 from US$135,000 in 1Q12.
For its petroleum shipping segment, Yee said the recent move to reduce oil production led by the OPEC to control the prices remained a concern for the shipping market.
“Our concerns for the petroleum delivery have more to do with the global production numbers and the number of barrels being produced.
“OPEC has been trying to shoot up the oil prices by collectively cutting the production and it is affecting the shipping volume.
“We continue to see more weakness in the demand resulted from the production cut,” he said.
MISC’s share price rose 2.58% or 17 sen to RM6.76 yesterday, representing a market capitalisation of RM30.18 billion.