PETALING JAYA: MISC Bhd’s net profit for the first quarter ended March 31, 2019 jumped 64.4% to RM510.50 million from RM310.60 million a year ago, underpinned by higher contribution from the liquefied natural gas (LNG) and petroleum segments.
Its revenue of RM2.28 billion was 12.7% higher than RM2.02 billion in the previous year’s corresponding quarter.
The group has approved an interim dividend of 7 sen per share for the quarter under review amounting to RM312.5 million, payable on June 25.
MISC said petroleum tanker earnings are expected to continue to trend downward in the first half of the year on the back of persistent tonnage oversupply, seasonal factors and oil supply cuts.
“While 2019 as a whole is expected to be a better year for the tanker sector than 2018, continued OPEC-led oil production cuts and the end of Iran oil waivers by the US are a concern as these may affect shipping volumes. Over the longer term, growth in tonne-miles that is driven by higher exports from the Atlantic region to Asia suggests a more robust outlook in charter rates,” the group said.
In the LNG shipping segment, spot charter rates have eased off in Q1 2019 on the back of diminishing winter demand and new tonnage delivery, after a historical winter peak towards the end of 2018. In the second half of 2019, tanker deliveries are expected to slow and new liquefaction capacity will likely help keep rates afloat.
Two new LNG carriers have joined MISC’s fleet at the end of 2018 and early 2019, providing a source of income growth for the segment. These additions and the existing portfolio of long term charters that are in place will underwrite a steady performance for MISC’s LNG business for the year.
MISC said the offshore segment continues to be supported by healthy activities in oil and gas exploration and production.
“Our existing portfolio of long term contracts will also continue to support the stable financial performance of the offshore business segment.”
The heavy engineering segment is expecting to see more dry docking activities at its yard in view of encouraging growth in global sea trade. As more orders for LNG repairs have been received compared to last year, MISC said the segment is positive in maintaining the current level of marine repair activities for this year.
“As the industry outlook continues to be challenging in the current financial year, the heavy engineering segment remains cautious and committed to replenishing its order book, not only from the domestic market but also various geographical areas,” MISC said.
