Brighter prospects in H2 for MISC
Maritime company’s quarterly net profit down 42%
PETALING JAYA: Maritime services company MISC Bhd’s net profit for the second quarter fell 42.3% to RM321.2mil on the back of further operating losses in its petroleum and heavy engineering segments.
Its revenue for the period ended June 30 was down 7.1% to RM2.14bil, affected by the liquefied natural gas (LNG) segment, due to lower charter rates for one of its carriers following the renewal of its contract.
For the first half of the year, the group’s net profit plunged 48.7% to RM631.8mil, while revenue was down 21.3% to RM4.16bil.
However, for the second half the group expected brighter prospects in line with the steady recovery in oil prices and positive developments in its key segments.
In a filing with the stock exchange, the group noted that the demand for crude tankers was set to pick up, with the very large crude carrier segment expected to benefit the most, especially for the Arabian Gulf-Asia trade.
“Tanker demolition rates have remained high, but tanker earnings are still being hit as fleet growth continues to exert pressure on the petroleum freight rates.
“Nevertheless, rising global oil consumption, higher US exports and eroding inventories are expected to support the recovery in freight rates in the medium to longer term,” it said.
In the LNG shipping segment, the group noted that current spot rates were gradually rising on the back of improved chartering activities.
The international LNG trade has continued to thrive from both a supply and demand perspective, mainly driven by demand growth from strong enforcement of coal-togas switching policies in China and expected new and/or ramping of LNG supplies from the Atlantic during the second half of 2018.
“Despite the tonnage oversupply situation in the spot market, indicators are positive for further improvements through the rest of the year,” it said.
The group added that the steady oil price recovery in recent months and renewed interest in growth opportunities have led to an increase of activities in the offshore segment, especially for developments within the Atlantic Basin.
Such optimism, it said, is expected to boost the number of projects approved, presenting further opportunities for the group, both locally and internationally.
“Our existing portfolio of longterm contracts will also continue to support the stable financial performance of the offshore business segment,” it said.
It said the heavy engineering segment, however, is expected to remain under pressure as there was still a lack of activities in the segment.
MISC fell six sen or 0.92% to close at RM6.46, giving the stock a market capitalisation of RM28.8bil.