MISC’s third quar­ter net profit dives 72%

> Lower con­tri­bu­tion from LNG, pe­tro­leum and heavy en­gi­neer­ing arms

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: MISC Bhd’s net profit plum­meted 72.3% to RM134.16 mil­lion for the third quar­ter ended Sept 30, 2016 against RM483.56 mil­lion in the pre­vi­ous cor­re­spond­ing pe­riod, due to lower con­tri­bu­tion from the liq­ue­fied nat­u­ral gas (LNG), pe­tro­leum and heavy en­gi­neer­ing seg­ments.

Rev­enue for the quar­ter dropped 8.5% from RM2.51 bil­lion to RM2.29 bil­lion.

In a fil­ing with the stock ex­change, MISC said the LNG ship­ping mar­ket is cur­rently over­whelmed by the num­ber of unutilised new­build de­liv­er­ies into the mar­ket which con­tin­ues to dampen the long-term and short-term char­ter mar­kets.

On a more pos­i­tive note, it said the group’s present port­fo­lio of long-term char­ters will sup­port the steady fi­nan­cial per­for­mance for the LNG busi­ness seg­ment.

MISC noted that pe­tro­leum tanker char­ter rates have soft­ened con­sid­er­ably in the mid­dle of the year as the sec­tor took de­liv­ery of a higher num­ber of new­builds com­pared with last year, amid a build-up in global crude and prod­ucts in­ven­tory.

How­ever, in tan­dem with the pick-up of re­fin­ery ac­tiv­i­ties lead­ing up to the peak win­ter months, MISC ex­pects its pe­tro­leum ship­ping busi­ness to end the year on a firmer note.

As up­stream ac­tiv­i­ties in the oil and gas sec­tor re­main sub­dued due to the low oil price en­vi­ron­ment, MISC is of the view that prospects of new ten­ders and projects re­main poor in the off­shore seg­ment.

“As a re­sult, or­der book re­plen­ish­ment at Malaysia Ma­rine and Heavy En­gi­neer­ing Hold­ings Bhd (MHB) re­mains a chal­lenge and the un­der­util­i­sa­tion of as­sets may sub­ject MHB to im­pair­ment charges which will sig­nif­i­cantly af­fect its cur­rent year fi­nan­cial re­sults,” it said.

De­spite the lack of green­field projects, MISC’s off­shore busi­ness unit has been able to par­tic­i­pate in bid­ding for var­i­ous brown­field de­vel­op­ment projects and longterm con­tracts in hand will con­tinue to sup­port the sta­ble fi­nan­cial per­for­mance of the off­shore busi­ness seg­ment.

MISC’s nine-month net profit, how­ever, rose 19.6% from RM1.72 bil­lion to RM2.05 bil­lion. Rev­enue came in at RM7.08 bil­lion.

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