Malaysia International Shipping Corporation Berhad (MISC Berhad), a shipping arm of Petronas, reported a rise in its net income to MYR 795.4 million (USD 198 million) for the first quarter of 2016, against the MYR 512.1 million (USD 127.4 million) seen in the corresponding period a year earlier.
The company’s revenue for the period decreased by 3.8% to MYR 2.39 billion from MYR 2.49 billion for the same quarter of 2015, while group operating profit surged by 67.1% to MYR 775 million, compared to MYR 463.6 million seen a year before.
The company’s LNG operating profit of MYR 747.8 million was 387.6% higher than the corresponding quarter’s profit of MYR 360.2 million, mainly from recognition of compensation for early termination of time charter contracts for two vessels, while the LNG revenue increased by 2.1% to MYR 683.2 million.
MISC also saw a rise of 27.3% in its Petroleum revenue to MYR 1.26 billion, mainly attributed to improved freight rates, while the Petroleum operating profit jumped to MYR 221.4 million against MYR 36.9 million reported in the corresponding quarter of 2015.
Offshore revenue of MYR 172.6 million was 12.6% lower than the corresponding quarter’s revenue of MYR 197.4 million. Offshore business recorded operating loss of MYR 164.5 million in the current quarter compared to corresponding quarter’s profit of MYR 82.4 million.
Heavy Engineering revenue of MYR 142.5 million was 69.3% lower than the corresponding quarter’s revenue of MYR 464.2 million as most of its Offshore projects are nearing completion.
“Barring any material cutback in global oil production, we expect the Petroleum shipping segment to continue to benefit from robust demand for tankers, despite stronger growth in tanker supply in 2016,” MISC Berhad said.
“While it is a challenge to develop new projects for the LNG shipping and Offshore businesses due to the depressed price of oil and gas, the group’s present portfolio of long term contracts in place for both business segments should help to underwrite a steady financial performance for the rest of the year.
“Given that the outlook of the Upstream oil and gas industry is projected to remain poor with the prolonged weakness in oil price, the prospects of the Heavy Engineering segment will remain very challenging.”
Last week, the company refuted media reports on the alleged discussions with TH Heavy Engineering Berhad (THHE) to acquire THHE’s floating production and fabrication businesses.
Namely, Business Times reported that it understood talks have been ongoing for MISC to acquire THHE’s business, claiming it to be a troubled Malaysian offshore marine contractor.