KUALA LUMPUR: MISC Bhd posted a net loss of RM43mil in the financial year ended Dec 31,2020 (FY20), versus a net profit of RM1.43bil in the previous year due mainly to the adverse impact of its legal dispute with Sabah Shell Petroleum Co Ltd.
Excluding the impact of the decision on the group’s subsidiary Gumusut-Kakap Semi-Floating-Production System (L) Ltd’s arbitration proceeding against Sabah Shell Petroleum Co Ltd, the group would have recorded a pre-tax profit of RM1.77bil, it said in a statement.
MISC’s operating profit in FY20 was 4.6% higher at RM2.02bil compared to RM1.93bil in the previous year due to improved margin on freight rates in the petroleum segment and a construction gain for a floating production, storage and offloading (FPSO) vessel.
Revenue was also 4.9% higher at RM9.4bil versus RM8.96bil in the previous year, with higher contributions from all segments except for petroleum.
However, the group recorded a pre-tax loss of RM123.6mil compared to a pre-tax profit of RM1.51bil in the previous year, owing to the recognition of provision for litigation claims as well as a write-off of trade receivables and a loss on re-measurement of finance lease receivables.
For the full year, MISC’s net loss per share stood at one sen. It declared an interim dividend of 12 sen per share, bringing full-year payout to 33 sen per share. The dividend will go ex on March 4,2021.
In the fourth quarter, group operating profit was at RM319.3mil, 33% higher over RM476.7mil in the previous corresponding quarter while revenue was RM2.64bil, or 11.2% higher than RM2.38bil previously.
On its outlook for the current year, MISC said spot charter rates in the LNG shipping market have surged due to the colder-than-expected Asian winder, increased LNG exports from the US to Asia and shortage of available vessels for sport charters.
“US exports to Asia have an outsized impact on shipping demand because of the longer routes compared to other producing regions, while the factors contributing to the lack of spot vessels include congestion at the Panama Canal.
“Nevertheless, the operating income of the LNG shipping segment continues to be underwritten by the portfolio of long-term charters that are in place, ” it added.
In the heavy engineering segment, the renewed lockdown in several major oil importing countries have put the recovery of the global oil market at risk.
In light of these uncertainties, MISC said the heavy engineering segment remains vigilant in pursuing business opportunities in other segments and new regions.