Malaysia International Shipping Corporation Berhad (MISC) posted 14.9 pct higher group revenue in its financial results for the third quarter ended 30 September 2015 totaling in RM 2 505.6 million (USD 587.6 million) when compared with RM 2,180.3 million recorded last year.
MISC said that the increase in group revenue was mainly due to improved freight rates in the petroleum business. However, a smaller fleet of operating vessels in chemical business, lower earning days in LNG business and different phases of project construction in heavy engineering caused declines in revenue of the respective businesses in the current quarter.
Group operating profit of RM618.9 million was 27.4% higher than the corresponding quarter’s profit of RM485.8 million, mainly from higher revenue in petroleum coupled with improvement in charter rates in chemical business.
MISC said that the group revenue for the cumulative 9-months of RM7,596.3 million was 8.4% higher from last year’s results.
“Improved freight rates in petroleum business, revenue recognized from an EPC project in the current period and finance lease income contribution of an FPSO unit which commenced in September 2014 were the main contributors to the increase in group revenue,” the financial report reads.
According to MISC, the petroleum shipping segment continues to enjoy the benefits of market strength in the first half of 2015 into the third quarter of the year, despite the quarter being a seasonally weaker period. This segment is likely to end the year on an equally strong note given the start of the winter season in the Northern Hemisphere, which is seasonally positive for this segment.
MISC expects the steady performance of the LNG shipping and offshore business segments of the past nine months to continue into the last quarter of the year on the back of long term contracts both business segments have in place.
“However, the outlook and prospects of the upstream oil and gas industry is projected to remain poor with the prolonged weakness in oil price. The cutback in exploration and production activities will continue to weigh heavily on the offshore construction activities for the heavy engineering segment. On a positive note, the segment’s marine repair business is expected to perform steadily for the rest of the financial year and to a limited extent, cushion the weak performance of offshore construction business,” the report adds.
“Operationally, the Group is expected to sustain its financial performance for the past 9 months into the final quarter of the financial year 2015. However, the overall performance for the financial year is still subject to potential accounting impact from impairment tests, if any,” MISC concluded.
MISC specializes in energy shipping, owning and operating offshore floating solutions, marine repair and conversion, engineering and construction works, maritime education and training, as well as owning tank terminals.
Its fleet consists of more than 110 owned and in-chartered LNG, chemical and petroleum vessels with additionally 14 offshore floating facilities. The fleet has a combined capacity of 12 million dwt with a tank terminal capacity of approximately 8.7 million cbm.