MISC expects to secure more jobs this year

KUALA LUMPUR: MISC Bhd expects to secure more projects this year, given the company's capability to take up to US$2 billion - US$3 billion worth of new jobs, compared to the US$1 billion projects clinched in 2018, said president and chief executive officer, Yee Yang Chien.

He said as of the first quarter of 2019, the shipping company had bid for jobs worth US$6 billion versus the similar value of bids for the whole of last year.

“We had a success rate of 20 per cent from the US$6 billion worth of projects that we bid for last year, and this was an improvement from the 14 per cent (success rate) recorded in 2017. So we hope the number will improve in 2019,” he told reporters after MISC's annual general meeting.

Yee said the company was not short of opportunities but needed to be picky, as every single project involved a handsome investment.

Therefore, a stringent assessment to choose the right jobs was crucial to ensure the company could execute them and deliver the numbers, he said.

MISC, he noted, was currently working on three to four bids.

In February, it was reported that MISC and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) were the frontrunners for two major contracts from Petronas Carigali's Limbayong oil and gas field development off Sabah.

When asked for an update, Yee said: “The tender is still open and it will be closed at end of this month.”

A research house said it expected MISC to win the project for the floating production, storage and offloading vessel charter job, while its 66.5 per cent-owned MMHE was likely to secure the engineering, procurement, construction, installation and commissioning contract. Last year, MISC, which is 62.7 per cent owned by Petronas, derived 35 per cent of its revenue from Petronas-related projects.

On prospects, Yee said 2019 would be another challenging year for the tanker market.

“Growth in seaborne oil demand is expected to be impacted by the recently announced Organisation of the Petroleum Exporting Countries-led production cuts and geopolitical uncertainty,” he said.

On the liquefied natural gas (LNG) segment, he said the company expected to continue to benefit from the strengths seen in 2018, supported by demand in Asia, additional supply from new liquefaction projects and slower LNG fleet growth in 2019.

“While the LNG spot rates reached a multi-year peak in late 2018, the sustainability of such rates remains uncertain in 2019.

“Nevertheless, the existing portfolio of long-term charters that are in place will underwrite a steady performance for MISC's LNG shipping unit into the next financial year,” he said.

The offshore segment would see healthy activities in oil and gas exploration and production and the company would be adding two new assets in 2018, providing positive income growth, he added.