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MISC 2Q net profit jumps to RM538.8mil

MISC Bhd’s net earnings jumped 79.9% to RM538.8mil in the second quarter ended June 30, 2021, from RM299.5mil in the previous corresponding quarter, owing to improvements in its marine engineering, shipping and offshore business segments and lower forex losses.

Revenue for the quarter was RM2.35bil, 7.7% higher than in the same quarter last year while operating profit jumped 19.9% higher year-on-year (y-o-y) to RM627mil.

The board of directors declared a dividend of seven sen per share, which brought year-to-date payout to 14 sen per share.

In a filing with Bursa Malaysia, MISC said its offshore business division’s revenue more than doubled to RM336.3mil from the previous corresponding quarter due mainly to the recognition of revenue from conversion of a floating, production, storage and offloading (FPSO) in the quarter.

This resulted in the segment operating profit rising 39.1% to RM52.5mil.

In the marine and heavy engineering segment, the group recorded a 94.9% y-o-y jump in revenue to RM302.5mil, owing to the negative impact of the yard shutdown during the movement control order in the comparative quarter.

The segment’s operating loss narrowed to RM26.3mil from RM100.2mil due to the additional cost provision associated with the Covid pandemic recognised in the comparative quarter.

In the petroleum and product shipping segment, operating profit was 5.1% higher y-o-y to RM212mil due to a one-off compensation for a contract renegotiation, which offset the impact of lower freight rates and lower earning days.

Meanwhile, operating profit in the LNG asset solutions business dropped 16.7% to RM58.9mil mainly due to higher vessel operating costs and impairment on receivables.

In the others segment, operating loss narrowed to RM39.1mil versus 2QFY20’s operating loss of RM65.5mil due to lower net foreign exchange loss.

The group also had a lower impairment on non-current assets of RM42mil compared to RM306mil in the corresponding quarter, the latter of which was recorded after the completion of the group’s assessment on the impact of the Covid pandemic and depressed oil price environment.

Moving forward, the group said its offshore business segment is focusing on the execution of the new FPSO project in hand, and will monitor the market for the next major project.

It is also cautiously optimistic over the marine and heavy engineering segment despite the oil and gas industry showing signs of recovery.

“The Marine business prospects are expected to continue to be impacted by the nation’s prevailing stringent border restrictions as foreign clients continue to opt for shipyards in countries with lower COVID-19 cases and more relaxed border restrictions.

“Meanwhile, the segment remains committed to replenishing its order book and optimising its operating costs along with ensuring safe execution and delivery of ongoing projects on time and on budget,” said MISC.


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