MISC Bhd says long-term charters for its liquefied natural gas (LNG) tankers and strong demand in the floating production storage and offloading (FPSO) market as well as steady charter rates for its oil tankers will overcome any weakness in the heavy engineering business.
The shipping company said revenue from LNG vessels business is expected to remain steady, supported by its portfolio long-term charters.
Meanwhile, its oil tanker segment will continue to improve the quality of its income and balance sheet through niche shuttle tanker business and the rejuvenation of its fleet with greener-fuelled tankers.
It, however, said the expectations of a weaker global economy could negatively impact its heavy engineering and FPSO businesses as companies turn cautious on their capital expenditure.
MISC posted a 63% rise in earnings to RM613mil or earnings per share of 13.7 sen for its first quarter ended March 31, 2023.
This was due to improved operating profit, coupled with a higher share of profit from joint-venture entities, despite higher recognition of impairment of non-current assets in the current quarter.
Revenue for the period grew by 7% year-on-year to RM3.08bil.
This was driven by improved freight rates in the petroleum and product shipping segment and rising revenue from ongoing projects, coupled with higher dry-docking and repair activities in the marine and heavy engineering segment.
“Our robust performance stems from our core strength of forging partnerships with strategic clients, championed by our team members who are committed to our strategic aspirations. Nevertheless, we are attentive to the slowing global growth and changing energy needs worldwide.
“As we embark on our business transformative journey, we are determined to seize these opportunities, capitalising on our financial and brand strength, both regionally and globally,” said president and group chief executive officer Captain Rajalingam Subramaniam in a statement.
MISC’s adjusted net cash generated from operating activities for the quarter was RM1.5bil, which was RM383.8mil or 33.4% higher compared to RM1.15bil in the previous corresponding quarter.
The group recorded net cash flows generated from operating activities of RM907.1mil for the quarter, which was RM445.5mil or 96.5% higher y-o-y due to higher operating performance in the quarter.
In addition, MISC recorded lower payments for costs relating to turnkey activities for the conversion of an FPSO amounting to RM625.8mil in the period compared to payments of RM687.5mil in the previous corresponding quarter.
MISC has declared a seven sen tax-exempt interim dividend for the period, payable on June 22.
Source: The Star