KUALA LUMPUR: MISC Bhd posted net profit of RM429.80mil in the first quarter ended March 2021, which was a turnaround from the net losses of RM1.15bil a year ago due to provision for litigation claims a year ago.
It announced on Thursday its revenue increased by 1.1% to RM2.54bil from RM2.51bil. Earnings per share were 9.6 sen compared with loss per share of 25.90 sen.
The net losses in 1Q 2020 were due to for provision litigation claims of RM1.05bil.
“Group operating profit of RM463.8mil was RM381.3mil or 45.1% lower than the corresponding quarter's profit of RM845.1mil, ” it explained. It declared an interim dividend of seven sen a share, similar to last year.
MISC said its LNG asset solutions revenue of RM685.7mil was RM10.2mil or 1.5% lower than the RM695.9mil revenue last year, mainly due to the strengthening of the ringgit against the United States dollar.
Its operating profit of RM300.9mil fell by 16.8% from the RM361.7mil a year ago, mainly from higher vessel operating costs during the quarter.
MISC said revenue from the petroleum & product shipping fell by 35.3% to RM795.1mil from RM1.23bil a year ago mainly from lower freight rates in the current quarter.
Operating profit declined by 89.8% to RM34.4 million from RM336.5mil mainly due to the lower freight rates as mentioned above.
However, the offshore business revenue jumped more than 100% to RM696mil from RM238.1mil mainly from the recognition of construction revenue for a floating production, storage and offloading (FPSO) in this quarter.
This saw its operating profit increase by 49.4% to RM239.3mil from RM160.2mil mainly due to the construction gain recognised for the FPSO.
Revenue from the marine & heavy engineering slipped by 0.9% to RM343.5mil mainly from lower number of vessels secured for repair and maintenance works in the marine segment.
“This was due to the limited volume of marine repair projects in the current market as a result of high charter rates offered for shipments during the prolonged winter period as well as the lingering effects of Covid-19 pandemic, ” it said.
MISC said the marine & heavy engineering segment swung into an operating loss of RM101.9mil compared to RM5.6 million profit a year ago.
It attributed this mainly due to the lower revenue mentioned above and additional cost provision recognised as a result of revised target completion date for an on-going project in the current quarter.
Q1 FY21 vs 4Q FY20
MISC said group revenue of RM2.54bil in 1Q FY21 dipped by 3.8% from RM2.64bil in 4Q FY20.
It attributed this mainly due to lower revenue from on-going projects and lower number of vessels secured for repair and maintenance works in the marine & heavy engineering segment in the current quarter.
However, the reduction in revenue was mitigated by higher earning days in the petroleum & product shipping and LNG asset solutions segments.
MISC said group operating profit of RM463.8mil was 45.3% higher than the preceding quarter's profit of RM319.3mil, mainly from higher earning days in the petroleum & product shipping and LNG asset solutions segments coupled with higher construction gain recognised for an FPSO in the current quarter in the offshore business segment.
“However, the group's profit before tax of RM405.7mil was RM148.9mil or 26.8% lower than the preceding quarter's profit of RM554.6mil.
“The preceding quarter's profit included recognition of a one-time gain from a contract extension secured by a joint venture and a partial reversal of the amount written off of trade receivables relating to the group’s arbitration proceeding against SSPC to reflect the latest outstanding balance from SSPC at the financial year end, ” it said.