Malaysian MISC Berhad, a provider of energy-related maritime solutions and services, ended the first quarter of this year with a considerable profit increase.
Group profit before tax rose to MYR 542 million in Q1 2019 from MYR 319.2 million recorded in the corresponding period in 2018.
As explained, the increase was driven by a higher operating profit, gain on acquisition of a business and gain on disposal of a ship. However, it was offset with higher finance costs due to the increase in borrowings.
MISC revenue for the quarter ended March 31, 2019, was MYR 2.3 billion, a rise of 12.7% compared to Q1 2018 revenue of MRY 2.02 billion. The increase was due to the improved freight rates recorded during the quarter for Aframax, VLCC and Suezmax vessels in the petroleum segment. Additionally, heavy engineering revenue also increased resulting from higher completion progress of ongoing projects. A higher number of operating vessels in the LNG segment also attributed to the higher revenue in Q1 2019.
Group operating profit grew to MYR 591.9 million in Q1 2019 from MYR 383.4 million seen in Q1 2018 following improved freight rates in the petroleum segment as explained above. Additional charter rate for floating storage units (FSU) in the LNG segment also contributed to the higher operating profit in the first quarter.
However, the increase was reduced as the heavy engineering segment recorded higher unabsorbed overheads as expected contract awards have yet to materialize. The offshore segment also recorded lower operating profit due to the inclusion of construction gain from FSO Benchamas 2 in the quarterly results.
“Despite the prevailing challenges, MISC once again proved its resilience by turning in commendable financial and operational performances across our business segments,” Yee Yang Chien, MISC’s President and CEO, commented.
“We expect no less than another challenging year ahead. Nonetheless, we are confident of the growth opportunities available in the global energy industry and we believe we have the resources and financial stability to support our long-term efforts in strengthening our position in the market as well as filling the growth pipeline with a right mix of new projects.”
“We remain optimistic on the long-term prospects and possibilities that lie ahead,” he concluded.
As of December 31, 2018, MISC’s fleet consisted of 120 owned and in-chartered LNG, petroleum and product vessels, 15 floating production systems (FPS) as well as 2 LNG FSUs. The fleet had a combined deadweight tonnage capacity of around 16 million tons.