MISC’s earnings up 67% in 1Q

For 1Q, the company declares a dividend of 7 sen per share, to be paid on June 25, 2019


MISC Bhd’s earnings soared by 67% year-on-year (YoY) to RM516 million in the first quarter ended March 31, 2019 (1Q19), due to lower impairment losses, interest income and net foreign-exchange gains.

The energy shipping group’s revenue for the period rose 12.7% to RM2.28 billion, boosted by growth in most of its segments.

In a filing to Bursa Malaysia last Friday, MISC stated that revenue from its liquified natural gas (LNG) segment rose by 7% to RM625 million, supported by the higher number of operating vessels in 1Q19.

The petroleum segment recorded a revenue of RM1.17 billion, 20% higher YoY, on higher freight rates in the period for Aframax, very large crude carrier and Suezmax vessels, it noted in its exchange filing.

Its offshore segment recorded a lower revenue of RM270 million, 8.5% lower YoY than the corresponding year’s quarter which includes the construction revenue of floating, storage and offloading Benchamas 2 project.

For its heavy engineering segment, higher progress on ongoing projects in the first three months has contributed to the increase in revenue for the segment by 12.7% YoY to RM202.8 million.

Going forward, MISC highlighted seasonal factors and oil supply cuts as major factors that will continue to affect the petroleum tanker earnings.

Over the longer term, MISC remains optimistic on charter rates outlook as it sees higher exports from the Atlantic region to Asia.

As for the LNG segment, tanker deliveries are expected to slow and new liquefaction capacity will likely help keep rates afloat.

“Two new LNG carriers have joined MISC’s fleet at the end of 2018 and early 2019, providing a source of income growth for the segment.

“These additions will underwrite a steady performance for MISC’s LNG business for the year,” it said.

The offshore segment continues to be supported by healthy activities in oil and gas exploration and production (E&P).

The company added that there is an increase in number of opportunities in global offshore E&P space, especially for developments within the Atlantic basin.

“MISC’s offshore business unit will be actively assessing the merit of pursuing these opportunities in the current year. Our existing long-term contracts will also continue to support stable financial performance for the business segment,” the company said.

For 1Q, MISC declared a dividend of seven sen per share, to be paid on June 25, 2019.

MISC’s stock closed two sen lower at RM6.52 last Friday, valuing the company at RM29 billion.