PETALING JAYA: Boosted by its liquified natural gas (LNG) business and a turnaround in its petroleum segment, MISC BHD posted a net profit that came in RM8.7% higher to RM1.42bil for the financial year ended Dec 31,2019 (FY19) from the RM1.31bil a year ago.
Revenue, however, grew at a slower pace of 2.1% to RM8.96bil from RM8.78bil previously.
In notes accompanying its results, the LNG carrier said that petroleum freight rates were elevated and volatile throughout the fourth quarter (Q4) of 2019 on strong seasonal demand and geopolitical factors.
“The petroleum shipping segment was able to reap some of the benefits of the robust albeit volatile market and ended the year on a stronger note.”
In Q4, the company’s net profit fell by about a quarter to RM249.90mil from RM338.70mil a year ago. Its revenue dipped slightly to RM2.37bil from RM2.39bil.
Its earnings per share stood at 5.6 sen compared with 7.6 sen before.
The company announced a dividend of nine sen a share and special tax exempt dividend of three sen a share totalling 12 sen. The dividends will go ex on March 2.
On the current year, MISC said the tanker market is widely expected to remain firm in 2020 due to fewer deliveries and growing long-haul prospects as well as demand growth arising from the International Maritime Organisation (IMO) 2020 sulphur cap implementation.
However, it cautions that the Covid-19 virus outbreak has posed some risks to the oil and tanker market, and whilst the impact is currently uncertain, the tanker market could face short-term headwinds if the situation escalates.
It said growth in seaborne oil demand is expected to be impacted by the recently announced Opec-led production cuts, and geopolitical uncertainty continues to cloud future energy demand.
For its LNG shipping segment, MISC said the spot rates ended the year lower compared with the previous year mainly due to lack of demand, owing to mild winter and high inventories.
“However, liquefaction expansion in North America and the Middle East is expected to lead to an increased requirement for vessels and this should support charter rates going forward.
“Nonetheless, the group’s present portfolio of long-term charters will underwrite the steady performance of MISC’s LNG business segment, and the two long-term contracts secured in 4Q 2019 will provide growth in future years, ” it added.
As for its heavy engineering segment, the company remains prudent on the near-term outlook amid uncertainties on the timing of capital spending by major oil and gas players despite there being an increase in offshore activities.
In a statement, MISC’s president and group CEO Yee Yang Chien said the group would continue to see new investment opportunities despite the backdrop of uncertain global growth outlook.
“We intend to ride this tailwind with the mission to further accelerate our growth in 2020, ” Yee added.
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