MISC sees lower Q2 earnings, proposes 7 sen dividend

PETALING JAYA: MISC Bhd reported a 42.3% decline in net profit to RM321.2 million for the second quarter ended June 30 against RM556.5 million in the previous corresponding period, dragged by lower contribution from all business segments, particularly widened operating losses for petroleum and heavy engineering.

Revenue went down 7% to RM2.14 billion from RM2.3 billion.

The group proposed an interim dividend of 7 sen per share for the quarter under review.

MISC’s liquefied natural gas (LNG) segment registered a lower operating profit of RM274.6 million compared with the RM557.7 million in the same quarter a year ago, as corresponding quarter’s profit included recognition of compensation for early termination of a time charter contract coupled with lower revenue in the current quarter.

Its petroleum business’ operating loss widened to RM54.4 million from RM20.1 million, mainly due to higher bunker and vessel depreciation costs.

For the offshore segment, its operating profit dipped 8.3% to RM146.6 million, due to the absence of reimbursable revenue from demobilisation of mobile offshore production units.

The heavy engineering saw its operating loss widen to RM46 million from RM10.3 million because of additional costs incurred.

MISC’s first-half net profit fell 48.7% to RM631.8 million from RM1.23 billion on the back of a 21.3% drop in revenue to RM4.16 billion from RM5.29 billion.

Looking ahead, the group said as Opec-led production cuts start to ease over the second half of 2018, it will be positive for the tanker market as demand for crude tankers is likely to pick-up and the very large crude carriers segment is expected to benefit the most, especially for the Arabian Gulf-Asia trade.

In the LNG shipping segment, MISC said current spot rates are rising gradually on the back of improved chartering activities.

It also believes that the steady oil price recovery in recent months and renewed interest in growth opportunities have led to increase of activities in the offshore segment, especially for developments within the Atlantic Basin.