Better 4Q results support MISC'S ratings

Global rating agency Moody's says that the results of MISC Berhad ("MISC") for the fourth- quarter ended December 2012 were better than expected and support its Baa2 rating and stable outlook. "The strong performance of the LNG, offshore and heavy engineering segments boosted the company's overall results in 4Q 2012," says Vikas Halan, a Moody's Vice President and Senior Analyst.

Although MISC's revenue from continuing operations declined marginally by 1% to $786 million in Q4 from a year ago, its EBITDA from continuing operations ( excluding one-off gains and impairment losses), or normalized EBITDA, increased by $54 million to $269 million over the same period.

In addition, the impairment in vessel values declined to $36 million during the quarter from $87 million a year ago. However, the impairment provision for the quarter was higher than for the quarter ending June 2012 ($13 million) and September 2012 ($7 million) the previous two quarters. MISC also recorded one off gain of $92 million following lease commencement of LNG regasification project and realization of 50% intercompany profit following divestment of 50% equity interest in a subsidiary ($33 million).

The company's results for full-year 2012 were also better than the cumulative 12 months period ended 31 December 2011. Net profit from continuing operations improved to $527 million from $272 million in the comparative period, mainly on account of lower impairment provisions, one off gains in Q4.

However, the normalized EBITDA declined marginally to $945 million for FY 2012 from $956 million in the comparative period while revenue declined by 4.2% in FY2012.

Furthermore, MISC's borrowings have declined by about 32% since December 2011 to $3.0 billion, following the completion of an asset sale worth $ 2.0 billion in December 2012 to its parent, Petroliam Nasional Berhad (" Petronas", A1 stable), of which the Group collected USD1.7 billion cash proceeds in December 2012. It repaid $1.25 billion of debt using the proceeds.