MISC: MARINE SECTOR TO STAY CHALLENGING
Company keeps vigilance stance on outlook due to uncertainty in capital spending by oil and gas players
MISC Bhd expects the outlook for the marine business to remain challenging as shipyards strive to capture opportunities amid stiff competition.
The company said although there has been an increase in offshore activities, the Marine & Heavy Engineering segment is maintaining its vigilance stance on its outlook in the near term due to uncertainty in capital spending by major oil and gas players.
MISC reported a 3.7 per cent lower revenue of RM2.14 billion in the third quarter ended Sept 30 this year compared with RM2.22 billion in the same quarter last year.
The decrease in group revenue was due to a one-time reimbursement cost on towing and installation of a project in the offshore segment, recognised in the corresponding quarter.
The heavy engineering segment’s revenue also decreased due to post-sail away projects and lower costs plus revenue, following the completion of the main contract in the current quarter.
MISC’s petroleum segment recorded lower revenue due to a lower number of operating vessels in the current quarter.
President and group chief executive officer Yee Yang Chien said the strength and resilience of MISC’s core businesses contributed to a stable financial performance and will pave the way towards a positive financial close this year.
“We have been consistent in pursuing our value creation strategy of investing in assets on demand for long term charters to premium customers that will underpin a predictable and sustainable annual operating cash flow while funding new growth opportunities,” he said yesterday.
MISC said the decrease in group revenue was softened by an uplift in the liquefied natural gas (LNG) business segment, contributed by a higher number of operating vessels in the current quarter following lower drydockings and the acquisition of two LNG carriers in December last year and January this year.
Group operating profit of RM376.4 million was RM21.9 million higher than the corresponding quarter’s profit of RM354.5 million due to the higher margin on freight rates in the petroleum segment as well as higher revenue from the LNG business segment.