KUALA LUMPUR (Feb 18): MISC Bhd registered a net profit of RM556.5 million in its fourth quarter ended Dec 31, 2020 (Q4FY20), more than double the RM250 million reported a year earlier, as the shipping company narrowed its impairment loss during the period. 

Revenue rose 11.2% to RM2.64 billion from RM2.38 billion a year ago, underpinned by growth in revenue from its offshore and heavy engineering segments. 

Meanwhile, earnings per share surged to 12.5 sen from 5.6 sen. 

MISC has declared a fourth tax-exempt dividend of 12 sen per share in respect of the financial year ended Dec 31, 2020 (FY20) amounting to RM535.6 million, to be paid on March 16, 2021.

In a filing exchange today, the group said its liquified natural gas (LNG) segment's profit rose a marginal 0.5% or RM3 million to RM651.4 million, mainly contributed by higher earnings days following lower-dry dockings and delivery of a very large ethane carrier (VLEC) in the current quarter. 

However, its petroleum segment’s revenue declined by 40.1% or RM464.3 million to RM694.3 million on the back of lower freight rates and fewer vessels in operation during the period.

The group added its offshore segment’s revenue posted a gain of RM307.3 million to RM604.6 million due to the recognition of construction revenue for a floating production, storage and offloading unit (FPSO) beginning this quarter.

However, for FY20, MISC posted a net loss of RM43 million versus net profit RM1.43 billion a year earlier, on the back of revenue of RM9.4 billion against RM8.96 billion previously.

MISC attributed the loss to a provision for litigation claims and write-off of trade receivables and loss on re-measurement of finance lease receivables.

“Revenue of RM696.5 million was RM420.8 million higher than the corresponding quarter’s revenue of RM275.7 million mainly from increased activities in ongoing heavy engineering projects,” the group said.

Looking forward, the group expects the crude tanker market to remain challenging in the near term, amid uncertainties over the recovery of oil demand and with vessel oversupply weighing on spot markets.

“The recent reimposition of lockdowns in various parts of the world due to Covid-19 could hamper the economic recovery.

“On the other hand, an effective global roll-out of Covid-19 vaccines is likely to bring back the increase in refinery runs in the second half of 2021, which would drive tanker demand,” it said.

MISC views that as the oil market rebalances, the recovery in the oil and gas sector is expected to be gradual.

“Although opportunities may be limited in the near term due to the cutback in capital spending by major oil companies, the offshore business segment will concentrate on the execution of the new FPSO project in hand while still continuing to source for attractive opportunities in targeted markets,” it added.

The group also said spot charter rates in the LNG segment have surged on the back of strong demand resulting from a colder-than-expected Asian winter, increased LNG exports from the US to Asia and a shortage of available vessels for spot charters. 

In a separate statement, MISC president and group CEO Yee Yang Chien said 2020 was a year like no other for many industries and will forever be remembered as a year of uncertainties and disruptions brought about by the Covid-19 global pandemic. 

“The year for us was one where we navigated our moves strategically and remained committed to continue our pursuit for markets, which are integral to the build-up of our sustainable income. 

“As a testament to our commitment, we made an impactful entry into the fourth quarter, which began with the successfully delivery of our first very large ethane carrier (VLEC) marking our official entry into the niche global ethane market, followed with our maiden foray as the commercial operator and ship manager of South East Asia’s first dual-purpose liquefied natural gas bunker vessel (LBV) — both of which marked a first for the group. 

“The quarter was given a good close with the first condensate received by FSO Golden Star in Vietnam and the extension of the FPSO Espirito Santo lease contract in Brazil,” he said. 

At the noon break, shares of MISC were five sen or 0.79% higher at RM6.35, giving it a market capitalisation of RM28.35 billion.