KUALA LUMPUR (May 24): MISC Bhd announced a 64.4% jump in first quarter net profit to RM510.5 million or 11.4 sen per share, from RM310.6 million or seven sen per share a year ago, buoyed by higher vessel utilisation and better rates.
Revenue for the quarter ended March 31, 2019 came in 12.7% higher at RM2.28 billion, compared with RM2.02 billion a year ago, MISC's stock exchange filing today showed.
The group declared a tax-exempt first interim dividend of seven sen per share, payable on June 25.
MISC said its liquefied natural gas (LNG) segment saw improved earnings during the quarter due to higher number of operating vessels, coupled with additional charter rate for floating storage units.
Its petroleum business segment, it added, was profitable thanks to higher freight rates for Aframax, very large crude carrier (VLCC) and Suezmax vessels.
Meanwhile, lower profitability at its offshore segment was due to the inclusion of construction gain from floating, storage and offloading (FSO) Benchamas 2 in the year-ago first quarter.
MISC said the group's heavy engineering segment continues to bleed due to higher unabsorbed overheads, as expected contract awards have yet to materialise.
The group said 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.
It said that 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.
"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," it added.
The offshore segment continues to be supported by healthy activities in oil and gas exploration and production but outlook for its heavy engineering segment this year remains cautious.
Shares in MISC fell two sen or 0.31% to close at RM6.52 today, bringing a market capitalisation of RM29.1 billion.