Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 13): MISC Bhd's net profit jumped 79.9% in the second quarter ended June 30, 2021 (2QFY21) to RM538.8 million from RM299.5 million, thanks to lower impairment, and improvement in its petroleum shipping and non-shipping businesses.

Quarterly earnings per share rose to 12.1 sen, from 6.7 sen, MISC group filing showed. The group has approved a second dividend of RM312.5 million or seven sen per share, which goes ex on Aug 30.

At operating profit level, MISC's performance improved by 19.9% to RM627 million, from RM522.9 million. The group booked RM42 million of impairment in the latest quarter, against RM306 million last year.

Segment-wise, MISC saw much narrower loss for the marine and heavy engineering division due to lower base in last year's quarter due to Movement Control Order.

This was coupled with better profit led by offshore business division on floating production storage and offloading (FPSO) vessel conversion, as well as petroleum and product shipping division due to one-off contract renegotiation compensation.

However, liquefied natural gas (LNG) asset solutions profit came in lower due to higher operating costs and impairment on receivables.

Meanwhile, the group's quarterly revenue rose 7.66% to RM2.35 billion from RM2.19 billion last year, supported by improvement from offshore business and heavy engineering division.

This was as petroleum and product shipping division revenue contribution fell, due to lower freight rates and lower earning days from vessel disposals and redeliveries since last year. LNG segment revenue remained flat despite deliveries of ethane carriers due to a stronger ringgit against the US dollar.

For the six-month period ended June 30, 2021 (6MFY21), MISC booked a cumulative net profit of RM968.6 million or 21.7 sen per share, against a net loss of RM857.3 million or 19.2 sen loss per share.

Last year's loss was mainly due to litigation claims of RM1.05 billion in 1QFY20 as well as the wider impairment.

At operating profit level, MISC's 6MFY21 results weakened by 20.32% to RM1.09 billion from RM1.37 billion. This was due to weaker performance across all segments except for the offshore business division, amid a stronger ringgit, lower freight rates, and additional cost provision for the marine and heavy engineering segment.

Half-year revenue rose by 4.14% to RM4.89 billion from RM4.7 billion as revenue from offshore business and heavy engineering divisions more than offset weaker petroleum and LNG division's revenue decline.

On prospects, MISC sees stable earnings from existing contracts for its LNG division and offshore business divisions. Meanwhile, the petroleum division sees positive medium-term prospects on rising supply and demand.

The marine division, however, may continue to be impacted by the border restrictions "as foreign clients continue to opt for shipyards in countries with lower Covid-19 cases and more relaxed border restrictions".

"Meanwhile, the segment remains committed to replenishing its order book and optimising its operating costs along with ensuring safe execution and delivery of ongoing projects on time and on budget," it said.

At noon market break shares of MISC slid one sen or 0.15% to RM6.70, valuing the group at RM29.91 billion.

Edited ByLam Jian Wyn
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