Highlights of the MISC Group’s Financial Performance for the Third Quarter of 2024:
- Group revenue for the period ended 30 September 2024 was comparable to the corresponding period ended 30 September 2023 while the Group revenue for the quarter ended 30 September 2024 was lower than the corresponding quarter ended 30 September 2023.
- Group operating profit and profit attributable to equity holders of the corporation for the period ended 30 September 2024 were higher than the corresponding period ended 30 September 2023 while the Group operationg profit and profit attributable to equity holders of the corporation for the quarter ended 30 September 2024 were lower than the corresponding quarter ended 30 September 2023.
- Group cash flows generated from operating activities for the period ended 30 September 2024 was lower than the corresponding period ended 30 September 2023.
Zahid Osman, MISC President and Group CEO said, “Our third-quarter results reflect the continued dedication and resilience of the MISC Group, and I am proud of our team’s commitment to ensuring steady progress and growth in the core businesses, even amid market complexities. We are committed to staying responsive to market dynamics and offering integrated value solutions to our customers. Moving forward, our focus is on delivering steady growth and value across our key segments by strengthening our financial framework and seizing opportunities that bring greater value to our stakeholders“.
SUMMARY OF KEY FINANCIAL INFORMATION | 30 September 2024
Currency: Malaysian Ringgit (MYR)
| MEDIA RELEASE | INDIVIDUAL PERIOD | CUMULATIVE PERIOD | |||
| Current Year Quarter | Preceding Year Corresponding Quarter | Current Year to Date | Preceding Year Corresponding Period | ||
| 30 Sep 2024 | 30 Sep 2023 | 30 Sep 2024 | 30 Sep 2023 | ||
| MYR’000 | MYR’000 | MYR’000 | MYR’000 | ||
| 1 | Revenue | 2,963,200 | 3,365,100 | 9,930,900 | 9,993,400 |
| 2 | Profit/(loss) before tax | 361,400 | 464,600 | 1,720,800 | 1,431,400 |
| 3 | Profit/(loss) for the period | 344,700 | 398,700 | 1,669,800 | 1,331,600 |
| 4 | Profit/(loss) attributable to ordinary equity holders of the parent | 338,900 | 430,400 | 1,639,700 | 1,496,200 |
| 5 | Basic earnings/(loss) per share (Sen) | 7.6 | 9.6 | 36.7 | 33.5 |
| 6 | Proposed/Declared dividend per share (Sen) | 8.0 | 7.0 | 24.0 | 24.0 |
| As At End of Current Quarter | As At Preceding Financial Year End | ||||
| 7 | Net assets per share attributable to ordinary equity holders of the parent (MYR) | 7.92 | 8.80 | ||
Group Revenue, Operating Profit, Profit Attributable to Equity Holders of the Corporation for the Quarter Ended 30 September 2024
The Group revenue of RM2,963.2 million was RM401.9 million or 11.9% lower than the quarter ended 30 September 2023 (“corresponding quarter”) of RM3,365.1 million, mainly due to lower earning days from contract expiries and lower charter rates in the Gas Assets & Solutions segment, coupled with lower recognition of revenue from the conversion of a Floating, Production, Storage and Offloading unit (“FPSO”) following lower project progress in the Offshore Business segment. The decrease was however mitigated by higher revenue from ongoing Heavy Engineering projects.
The Group operating profit for the quarter ended 30 September 2024 of RM542.8 million was RM107.1 million or 16.5% lower than the corresponding quarter’s profit of RM649.9 million mainly due to lower revenue and higher vessel operating costs in the Gas Assets & Solutions segment. Offshore segment recorded operating loss in the current quarter from lower construction profit following lower project progress as well as increase in construction costs of the FPSO. The decrease in operating profit was partially cushioned by the Marine & Heavy Engineering segment which swung to an operating profit compared to operating loss in the corresponding quarter mainly due to project close-out and the favourable impact from project hedging whilst the operating loss suffered in the corresponding quarter was mainly attributable to additional cost provisions from price escalation impact on ongoing projects.
The profit attributable to equity holders of the corporation of RM338.9 million was RM91.5 million or 21.3% lower than the corresponding quarter’s profit of RM430.4 million contributed by the lower operating profit mentioned above.
Group Revenue, Operating Profit, Profit Attributable to Equity Holders of the Corporation and Cash Flows Generated from Operating Activities for the 9 Months Period Ended 30 September 2024
The Group revenue of RM9,930.9 million was comparable to the 9 months period ended 30 September 2023 (“corresponding period”) of RM9,993.4 million.
The Group operating profit of RM2,217.0 million was RM210.3 million or 10.5% higher than the corresponding period’s profit of RM2,006.7 million contributed by higher margin in the Petroleum & Product Shipping segment. In addition, the higher operating profit was also contributed by the recognition of cost recovery claims in the current period, offset with additional cost provisions recorded in the corresponding period due to revised schedules and price escalation impact for ongoing projects in the Marine and Heavy Engineering segment. The increase in the operating profit was however offset by the lower profit in Offshore Business from lower construction profit following lower project progress as well as increase in construction costs of an FPSO as mentioned above. Gas Assets & Solutions segment also recorded lower profit from lower earning days and charter rates coupled with higher vessel operating costs.
The profit attributable to equity holders of the corporation of RM1,639.7 million was RM143.5 million or 9.6% higher than the corresponding period’s profit of RM1,496.2 million due to the higher operating profit as mentioned above coupled with lower impairment provisions recognised in the current period.
The Group recorded cash flows generated from operating activities of RM2,596.9 million for the period ended 30 September 2024, which was lower by RM1,720.4 million or 39.9% compared to RM4,317.3 million in the corresponding period, due to higher payments made to creditors and lower collections from trade receivables.
Moving Forward
In the LNG shipping market, spot rates remained moderate in the third quarter of 2024 amidst subdued LNG demand in Asia and elevated inventory levels in Europe, keeping rates below previous years’ levels. The outlook for spot rates moving into the fourth quarter and beyond remains softer, driven by a high number of vessel deliveries, limited additional liquefaction capacity, and moderate anticipated demand in Europe. The segment also faces potential asset impairment risks amid a weakened spot market, where softer rates may affect the long-term value of assets. Furthermore, heightened geopolitical tensions could disrupt certain contractual arrangements which may have an adverse financial impact. Despite these challenges, the Gas Assets & Solutions segment will continue to pursue strategic opportunities to mitigate impacts on operating income, including repurposing vessels into floating solutions and redeploying them to charter parties where feasible.
Petroleum shipping rates for VLCC stabilised in the third quarter of 2024 amidst improving Asian oil demand, while mid-sized tanker rates softened due to weak seasonal demand and a slowdown in refinery runs in the US and Europe. Nonetheless, mid-sized tanker rates continue to remain above its ten-year average rate. The overall tanker market outlook remains supported for the rest of the year driven by strong growth in long-haul Atlantic-Asia trade as well as limited fleet growth. The Petroleum & Product Shipping segment’s operating income is projected to remain steady, underpinned by its fleet of long-term chartered vessels and the potential to capitalise on opportunities in the spot trading market.
The medium-term outlook for the offshore business segment remains positive supported by stable oil prices, with projects in South America, West Africa and the Asia-Pacific regions driving demand for newbuild Floating Production Storage and Offloading (FPSO) units. The revenue stream from the existing portfolio of long-term contracts and project being commissioned will continue to support this segment’s financial performance. Moving forward, the Offshore Business segment will actively pursue new opportunities in the market while maintaining a strong focus on the timely and efficient completion of existing projects to mitigate potential cost overruns.
For the Marine & Heavy Engineering segment, upstream capex spending is expected to remain stable amidst ongoing energy security concerns and geopolitical conflicts. While demand for oil and gas remains strong in the era of energy transition, the Heavy Engineering sub-segment aims to advance its growth by capitalising on opportunities in both conventional and new energy sectors. In the Marine sub-segment, the increase in upstream activities is expected to encourage expansion within the conversion portfolio, while the growing LNG fleet provides further opportunities for repair and maintenance services. The Marine & Heavy Engineering segment will remain focused on improving its contracting strategies to mitigate risks associated with supply chain disruptions and price volatility in view of a persistently uncertain operating environment.