Thursday 28 Mar 2024
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GEORGE TOWN (Aug 4): Shipping giant MISC Bhd’s net profit for the second quarter ended June 30, 2015 (2QFY15) rose a little over 2.5 times to RM745.2 million from RM288.08 million a year ago, mainly on higher revenue in petroleum and offshore businesses and lower operating costs from a smaller fleet of operating vessels in the chemical business.

The quarter’s results were also lifted by a net gain on disposal of ships, property, plant and equipment of RM2.13 million compared with a net loss of the same a year ago that amounted to RM47.92 million, its filing to Bursa Malaysia today showed.

Revenue for 2QFY15 was up a marginal 2.4% at RM2.6 billion from RM2.54 billion a year ago, primarily on improved freight rates in its petroleum business as well as revenue recognised from its engineering, procurement and construction (EPC) project in the current quarter.

Finance lease income contribution of a floating, production, storage and offloading (FPSO) unit, which commenced in September 2014 also uplifted revenue.

The group declared a first interim dividend of 7.5 sen for the quarter — up 87.5% from 4 sen last year — which will be paid on Sept 2.

Year-to-date, MISC’s net profit rose 59% to RM1.23 billion from RM774.48 million in 1HFY14, also mainly from improved revenue in the petroleum and offshore businesses, together with lower operating costs from smaller fleet of operating vessels in the chemical business.

1HFY15 revenue was up 5.4% at RM5.09 billion from RM4.83 billion in 1HFY14, primarily driven by improved freight rates in petroleum business, revenue recognised from an EPC project in the current period, and finance lease income contribution of an FPSO unit.

In a press statement, MISC said the financial performance for the remaining quarters of 2015 will continue to be supported by secured recurring income from a portfolio of long-term contracts in the liquefied natural gas shipping and offshore business segments.

“The strength in the petroleum shipping segment enjoyed in the first half of 2015 is likely to be carried into the second half of the year, barring any material cutback in global oil production.

“Full year financial performance of the petroleum shipping segment is expected to show a marked improvement over the performance of 2014. However, chemical shipping prospects still remain mixed,” it said.

MISC (valuation: 0.8; fundamental: 1.2) added that the heavy engineering business is currently active in various stages of the bidding process for several potential projects.

“Aggressive competition is expected for selected projects with participation of regional and international companies. Operationally, a lesser number of ongoing projects are in progress as compared to the previous financial year,” it also noted.

There is still residual revenue and profit to be recognised from some of the recently completed or delivered projects subject to approval of outstanding variation orders by the respective clients, MISC added.

As at 3.38pm, its shares rose 47 sen or 6.04% to RM8.25, for a market capitalisation of RM35.35 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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