PETALING JAYA: MISC Bhd’s net profit shrank 22.0% to RM266.1 million for the third quarter ended September 30, 2019 against RM341.0 million in the same quarter of the previous year, mainly due to lower contribution from the offshore business as well as impairment losses on ships, offshore floating asset and other investments.
Revenue for the period declined 3.7% to RM2.15 billion from RM2.23 billion.
MISC has declared an interim dividend of 7 sen per share for the quarter under review to be paid on December 10.
According to its Bursa filing, the liquefied natural gas (LNG) business reported an 11.5% increase in operating profit to RM278 million, mainly attributed to higher number of operating vessels.
The petroleum business saw an operating profit of RM21 million against a loss of RM27.4 million, mainly thanks to higher freight rates margin.
The heavy engineering business’ operating loss was lower at RM4.8 million due to conversion work cost incurred in its marine sub-segment.
Meanwhile, the offshore segment’s operating profit declined 16.4% to RM117 million from RM139.9 million, attributed to lower revenue and demobilisation costs in the quarter.
For the cumulative nine-month period of 2019, MISC’s net profit rose 20.9% to RM1.18 billion from RM972.8 million, with revenue expanding 3.1% to RM6.59 billion from RM6.39 billion.
MISC said geopolitical factors, strong seasonal fundamentals and scrubber installations have pushed freight rates to record highs and it is likely to remain robust in the fourth quarter.
“The petroleum shipping segment will reap the benefits of the robust albeit volatile market and is expected to end the year on a firmer note.”
The group also expects a similar outlook for its LNG business as a surge in spot rates has raised expectations that the ground is being laid for a robust winter market.
“Nevertheless, the operating income of MISC’s LNG business unit continues to be underwritten by the portfolio of long term contracts that are in place.”
On the other hand, MISC expects its offshore segment to be supported by healthy activities in oil and gas exploration and production as a renewed surge in upstream is expected to increase the number of floating production system contract awards in the next few years.
At 2.32pm, the stock was trading unchanged at RM8.30 on 699,500 shares done.
