MALAYSIA International Shipping Corp Bhd (MISC) is optimistic that freight rates will stay firm in the current year.
Chairman Tan Sri Mohd Hassan Marican said in the company's latest annual report that the global economic recovery, driven by higher consumption, was expected to be sustained, at least in the near term.
“We at MISC, however, continue to remain vigilant and cautious. We continuously monitor the global economic and geopolitical environment, regulatory developments and the positioning of our global competitors,'' Hassan said.
He said MISC would continue to capitalise on the projected growth in the liquefied natural gas (LNG) trade by building up its LNG fleet beyond its current 17 vessels and the additional six already contracted to support additional business from both its parent, Petroliam Nasional Bhd (Petronas), and third-party customers.
On the group's outlook, Hassan said MISC would continue to focus on growing the high-yielding energy transportation segment and retaining its leadership position in the LNG and petroleum shipping businesses.
“Efforts are being made to improve our capabilities and competencies to ensure the realisation of our vision to become the preferred provider of world-class maritime transportation and logistics services,'' he said.
Hassan said that due to the recovering global economy, the financial year to March 31 had been an exceptional one for the shipping business. This was despite geopolitical instability and uncertainties globally.
He attributed the exceptional performance to better freight rates in most of the shipping segments, and the incorporation of American Eagle Tankers Inc Ltd's (AET) financial results into the group.
The inclusion of AET had increased the contribution of the petroleum shipping business to 28% of the group’s bottom line, from 9%, thus effectively broadening MISC’s earnings base and at the same time reducing its reliance on the LPG shipping business, he added.
Hassan said the economic recovery, which strengthened global trade, had contributed to the surge in container shipping demand and to higher freight rates.
“Higher bulk shipping demand, driven mainly by China, coupled with tight bulk shipping capacity and port congestion, resulted in a dry bulk boom with a sharp upturn in bulk freight rates throughout the year,'' he said.
Hassan said that MISC, which completed the acquisition of AET in July last year, had benefited from the timing of the acquisition – which coincided with the upswing of the shipping market – and managed to realise the value of AET, as shown in this year’s results.
“Going forward, MISC expects a higher contribution from the enlarged petroleum shipping business through wider market coverage, cost and operational synergies, and a larger asset pool,'' he said.
For the year to March 31, MISC reported a 77.5% surge in group pre-tax profit to a record RM2.33bil from RM1.31bil the year before. Revenue was 40% higher at RM7.61bil, compared with RM5.43bil previously.
MISC has recommended a final dividend of 15 sen per share, tax exempt, plus a special dividend of 10 sen per share, also tax exempt. This would bring the total dividend for the financial year to 40 sen per share, the highest payout in the group's history.
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