KUALA LUMPUR (April 20): MISC Bhd is expecting its petroleum segment to remain profitable in FY17 despite a more subdued outlook towards the petroleum spot charter rate this year.

"We expect the petroleum spot charter rate for this year to be lower than 2016," said group chief executive Yee Yang Chien after the annual general meeting here today.

"However, suffice to say it will still be at a level that will remain profitable for us," said Yee.

Presently, 57% or 46 of MISC's existing petroleum vessels run on spot charter.

Similarly, Yee said MISC is not going to be impacted by what he described as a "dire, oversupplied" liquefied natural gas (LNG) shipping market, as all MISC's LNG tankers — old and new — have secured long-term charters.

MISC currently operates a fleet of 121 vessels comprising 78 petroleum tankers, 30 LNG units and 13 chemical tankers, as well as 14 offshore floating facilities.

It also has an existing order book of 8 additional tankers — five for petroleum, of which two are lined up for long-term contracts, while the rest are for LNG.

For its offshore segment, the company is currently eyeing three to four floating production, storage and offloading related contracts involving greenfield projects and asset acquisition this year, said Yee.

MISC registered a higher net profit for its financial year ended Dec 31, 2016 at RM2.58 billion versus RM2.47 billion the year before. Revenue was 12% lower at RM9.6 billion from RM10.9 billion.

However, stripping one-off gains, MISC's core earnings were down by 25% at RM1.98 billion, as its LNG, petroleum and heavy engineering segments lagged year-on-year while its offshore segment posted gains.