KUALA LUMPUR (May 27): MISC Bhd, the shipping arm of Petroliam Nasional Bhd (Petronas), expects no significant improvement in its financial results this year, dragged by its marine and heavy engineering segment.

MISC chief executive officer Yee Yang Chin said its 66.5%-owned subsidiary Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) will likely continue to experience a challenging environment.

However, the petroleum segment is expected to see positive growth, which will offset weak results by its marine and heavy engineering division.

“This, coupled with the predictability of the LNG (liquefied natural gas) and offshore segments, which provide a big chunk of our revenue, we are very confident we can hold the performance of 2014 in the current financial year ending Dec 31, 2015 (FY15),” Yee told reporters after MISC's annual general meeting here today.

The group has secured long-term time charters for the two segments, which will provide steady income for the group over the next few years.

On its loss-making chemical segment, Yee said MISC is keeping a mixed-to-challenging outlook, depending on the performance of the key manufacturing economies.

“Demand for chemical shipping is very much driven by what’s happening in the key manufacturing economies, as chemical products are inputs for the manufacturing cycle,” he said.

He added that the chemical segment is still expected to book a loss – albeit smaller one – for FY15 as the group has downsized its fleet size, giving it a more manageable portfolio.

For FY14, MISC posted a net profit of RM2.2 billion, up 6% from RM2.08 billion a year earlier, while revenue climbed 4% to RM9.3 billion from RM8.97 billion.

MISC (fundamental: 1.2; valuation: 0.8) shares closed 6 sen or 0.71% lower at RM8.34 today, bringing its market capitalisation to RM37.50 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.)