MISC revenue rises 10.4%
KUALA LUMPUR: MISC Bhd has posted a net loss of Rm1.16bil in the first quarter ended March 31, dragged down by the arbitration tribunal decision on the group’s legal proceeding against Sabah Shell Petroleum Company Ltd (SSPC).
In a press release, the company said it has decided to recognise a provision for litigation claims of Rm1.04bil, a write-off of trade receivables and a loss on the re-measurement of finance lease receivables amounting to Rm935.2mil following the award announced by arbitral tribunal.
“Albeit surprised and dismayed by the unexpected outcome of the award, the group is advised that it has legal merits to challenge the award and intends to pursue an application to set aside a substantial-portion of the claims awarded to SSPC.
“The group is determined to rigorously challenge, among others, the tribunal’s decision and a significant portion of the claims awarded to SSPC,” said MISC.
However, MISC’S revenue for the quarter rose 10.4% to Rm2.51bil compared to Rm2.27bil a year ago, driven by higher contributions from all segments except for the offshore segment.
“The heavy engineering segment reported an increase in revenue of Rm143.7mil following higher contribution from on-going projects coupled with increased conversion work. Higher earnings days brought about by lower dry-docking activities in the current quarter has contributed to an increase in LNG’S revenue of Rm70.5mil whilst improved freight rates in the Petroleum segment have generated an increase in revenue of Rm54.3mil,” MISC added.
Moving forward, the group expects the second half of this year to be “highly uncertain” as it is contingent upon the duration and magnitude of the pandemic’s impact on oil demand and the level of oil supply by the Organization of the Petroleum Exporting Countries (Opec) and non-opec producers.
In the first quarter of this year, the petroleum tanker market enjoyed positive momentum, supported by high demand for tankers to be used as floating storage amid a fall in global oil demand due to the Covid-19 pandemic.