MISC's Q4 earnings down, full-year net profit up slightly

PETALING JAYA: MISC Bhd’s net profit for the fourth quarter ended Dec 31, 2016 dropped by 29.6% to RM529.83 million from the preceding year corresponding quarter’s RM752.72 million, due to lower contribution from the liquefied natural gas (LNG), petroleum and heavy engineering businesses.

Revenue fell by 24% to RM2.51 billion from RM3.31 billion.

The group has proposed a second interim dividend of 20 sen per share.
In a filing with the stock exchange, MISC said its operating profit went down 35.2% to RM 666 million from RM1.02 billion for the quarter under review.

The group expects the petroleum shipping segment to come under pressure in 2017 due to high fleet growth and potentially lower demand as a result of reduced oil production by Organisation of Petroleum Exporting Countries members.

While demand for LNG shipping is expected to remain sluggish as tonnage oversupply will persist, MISC does not see any impact as most of its vessels are under long-term charters.

Meanwhile, it said the heavy engineering segment will continue with its efforts to reduce operating costs in line with the outlook for the industry.

MISC highlighted its efforts to replenish the order book, namely from onshore segment, hook-up & commissioning and facilities improvement. “The group’s offshore business segment’s stable financial performance will continue to be supported by long-term contracts,” it added.

For the whole of 2016, MISC registered a slight increase in net profit of 4.6% to RM2.58 billion, against RM2.47 billion a year ago on the back of a 12% drop in revenue from RM10.91 billion to RM9.6 billion.