KUALA LUMPUR (Aug 14): MISC Bhd's net profit for the second quarter ended June 30, 2019 (2QFY19) rose 24.5% to RM399.8 million from RM321.2 million a year earlier, on the back of higher revenue.
In a filing to the stock exchange today, MISC said its 2QFY19 revenue rose to RM2.16 billion from RM2.14 billion previously, mainly from higher number of operating vessels.
Earnings per share rose to 9 sen from 7.2 sen previously.
MISC declared an interim dividend of 7 sen per share, payable on Sept 18.
For the six months ended June 30, MISC's net profit surged to RM910.3 million against RM631.8 million in the same period last year, while revenue rose to RM4.44 billion from RM4.16 billion a year ago.
On its prospects, MISC said in the first half of the year, petroleum tanker earnings were considerably better than in the previous year, due to market rebalancing after a high level of scrapping in 2018, supported by long-haul crude trade growth.
However, it said continued OPEC-led oil production cuts, geopolitical risk in Iran and the recent tanker attacks in the Straits of Hormuz may affect shipping volumes in the shorter term.
Nonetheless, the latter half of 2019 is expected to pick up for the tanker market as ship supply will be crimped by vessels taken out of service for scrubber retrofitting, and tanker markets would be boosted by increasing US oil exports and increase in tonne-mile demand.
Meanwhile, it said the overall outlook for the heavy engineering segment remains uncertain amidst prolonged trade and geopolitical tensions, as well as slowing economic growth.
MISC said despite the uncertainties, offshore oil and gas production activities continue to improve albeit moderately.
It said the outlook for marine business continues to improve, supported by higher volume for upgrading and retrofitting work due to the implementation of IMO 2020 sulphur cap regulation.
Additionally, it said the recent contract award from Petronas Carigali Sdn Bhd for the Kasawari Gas Development project demonstrates the segment's commitment to ensure the sustainability of its order book.
"As the industry outlook continues to be challenging in the current financial year, the heavy engineering segment remains cautious and will focus on replenishing order book in various geographical areas as well as diversifying into other businesses," it said.
At the midday break, MISC shares rose 0.14% or 1 sen to RM7.21 for a market capitalisation of RM32.18 billion.