MISC Sails Through 2023 Recording RM2.12 Billion In Profits

MISC Group recorded revenue of RM4.27 billion which is RM105.3 million or 2.5% higher than the quarter ended 31 December 2022 with a revenue of RM4.17 billion that the group said was mainly due to higher revenue from new and ongoing projects for Heavy Engineering sub-segment and higher charter rates in Gas Assets & Solutions segment. The increase in Group’s revenue was however offset by lower revenue recognition in the Offshore Business segment from the conversion of a Floating, Production, Storage and Offloading unit (“FPSO”) following lower project progress in the current

Group operating profit for the quarter of RM874.7 million was RM219.6 million or 20.1% lower than the corresponding quarter’s profit of RM1,094.3 million mainly due to lower profit in the Offshore Business segment from lower construction progress from the FPSO conversion and additional cost provisions recognised in the current quarter while the decrease in the Gas Assets & Solutions segment’s operating profit was due to higher vessel operating costs in the current quarter.

The group said profit attributable to equity holders of the corporation of RM627.3 million was RM17.7 million or 2.7% lower than corresponding quarter of RM645.0 million mainly due to the lower operating profit mentioned above.

For the 12 Months Year Ended 31 December 2023, Group revenue of RM14.27 billion was RM404.7 million or 2.9% higher than the revenue for the 12-months year ended 31 December 2022 of RM13.86 billion which it said was mainly contributed by higher revenue from new and ongoing projects in the Marine & Heavy Engineering segment and improved freight rates in the Petroleum & Product Shipping and Gas Assets & Solutions segments. The increase in Group’s revenue was, however, offset by lower revenue recognition from the conversion of an FPSO following lower project progress in the current year.

Group operating profit for the year ended 31 December 2023 of RM2.88 billion was RM220.6 million or 7.1% lower than the corresponding year’s profit of RM3.10 billion mainly due to operating loss recorded in the Marine & Heavy Engineering segment primarily attributed to the additional cost provisions arising from revised schedule on ongoing projects during the current year.

However profit attributable to shareholders was much improved at RM2.12 billion while in FY2022 the group recorded RM1.822 billion.

Looking ahead, MISC said the LNG shipping segment, despite a sharp decline in December 2023 due to a mild winter and
European inventory buildup, spot rates remained elevated compared to historical levels. In the near term, softer market conditions are expected due to firm LNG fleet capacity growth. However, prospects remain positive driven by Asia’s LNG demand and increasing investments in LNG infrastructure. Additionally, tight vessel availability due to stricter environmental regulations requiring lower average vessel speed and retrofit timeouts, and canal disruptions at Suez and Panama will
potentially boost LNG tonne-mile demand. Notwithstanding the above, the operating income for the Gas Assets & Solutions segment is anticipated to remain stable, supported by its portfolio of long- term charters.

For the Petroleum shipping segment, market rates have remained firm, with average rates showing further escalation in the final quarter of 2023, despite a seasonal decline in December. Tight oil supply is anticipated through the first quarter of 2024 with the recent implementation of new OPEC+ output cuts. Nevertheless, the near-term outlook remains positive, supported by strong Atlantic exports and increased crude imports to Asia, and potentially higher tonne-mile demand due to shifts in trade patterns following the Red Sea crisis.

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