KUALA LUMPUR (Feb 6): MISC Bhd’s net profit fell 11.4% to RM959.03 million for its fourth quarter ended Dec 31, 2014 (4QFY14), from RM1.08 billion a year ago, mainly from higher impairment provisions in the current quarter.

Revenue was up 6.76% to RM2.29 billion, from RM2.14 billion in 4QFY13; while earnings per share (EPS) fell to 21.5 sen, from 24.3 sen a year ago.

The group also declared a second interim dividend of 6 sen per share for the quarter, payable on March 11, 2015. This brings total dividends declared for the full financial year 2014 (FY14) to 10 sen per share.

In a filing with Bursa Malaysia today, MISC (fundamental: 1.6; valuation: 1.8) attributed the growth in 4QFY14 revenue to improved freight rates in the petroleum business and commencement of finance lease of its floating production, storage and offloading (FPSO) vessel called FPSO Cendor, during the quarter.

“However, chemical business recorded lower revenue from a smaller fleet of operating vessels, while different phases of project construction caused a decline in heavy engineering revenue in 4QFY14,” it added.

For FY14, MISC’s net profit rose 5.7% to RM2.2 billion, from RM2.09 billion in FY13; while revenue rose 3.6% to RM9.3 billion, from RM8.97 billion.

MISC said FY14 earnings was higher, mainly due to improved freight rates in petroleum business, commencement of finance lease of FPSO Cendor during the year and lower operating costs from a smaller fleet of operating vessels.

On its prospect, MISC said it will be a challenging year for the oil and gas services segment such as fabrication and construction, given the reduction in capital and operating expenditures by major oil companies in a low oil price environment.

“The financial performance for the group in 2015 will continue to be underpinned by secured recurring income from a portfolio of long term contracts in the LNG shipping and offshore business segments.

“Despite the severe drop in global oil prices in the past few months, the petroleum shipping segment has found strength from sustained global oil production. Barring any material cutbacks in global oil production, the recent strength in petroleum shipping could be sustained for the year,” it added.

As at 3.39pm, MISC shares were up 0.65% at RM7.75, bringing a market capitalisation of RM34.55 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.)