KUALA LUMPUR: MISC Bhd
recorded a 58.7% drop in its earnings for the second quarter of this year compared to the previous corresponding quarter.
It announced a net profit of RM556.5mil in its quarter ending June 30, 2017, compared to RM1.34bil in the last corresponding quarter. The decrease in profit was in part owing to an impairment loss on ships, property, plant and equipment of RM133.6mil.
Group revenue of RM2.3bil in 2Q was 3.8% lower than the previous corresponding quarter's revenue of RM2.39bil, as the petroleum and heavy engineering segments posted weaker revenue in the current quarter.
The petroleum unit posted 12% lower revenue compared to the previous corresponding quarter owing to lower freight rates and earnings days in the current quarter.
Meanwhile, a revenue posting that was 13.5% lower year-on-year for the heavy engineering unit was mainly due to most ongoing projects in the sub-segment nearing completion.
MISC cites production cuts, and a drawdown of crude oil and products inventory as having a negative impact on demand for petroleum tankers.
“Freight rates have also been affected by high fleet growth in 2017, but demand for vessels have improved with the year-end seasonal demand.
“In the heavy engineering segment, the business will focus on diversifying into new revenue streams while working towards replenishing the order book,” according to MISC.
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