Impairments hit MISC's Q2 bottomline
KUALA LUMPUR: Delivering MISC Bhd's latest set of financial results, president and group CEO Datuk Yee Yang Chien said he remains positive over the group's operational performance in the quarter ended June 30, 2022, despite the negative impact of accounting impairments on the bottomline.
"MISC continues to record robust and commendable operational performance during the second quarter of the financial year.
"However, it is unfortunate that the overall financial performance for the period has been negatively impacted by accounting impairment of some of our older LNG carriers as well as adjustments made to the finance lease accounting for our ongoing Mero 3 FPSO project that is presently under execution," he said in a statement.
For the second quarter of its financial year, MISC made a net loss of RM19.1mil although revenue jumped over a third higher year-on-year (y-o-y) to RM3.21bil on improved contribution in all segments.
The result represented a loss per share of 0.4 sen.
For the quarter, the group declared a dividend of seven sen per share going ex on Sept 2, 2022, and payable on Sept 14, 2022.
On outlook, Yee said near-term prospects in the LNG shipping market remain positive due to strong global demand for LNG, especially from Europe.
The upstream oil and gas sector is also looking optimistic on the back of high oil prices, improved global oil demand and increased capex spending.,
"Demand for FPSOs is expected to stay firm with increasing project awards expected over the next few years.
"As such, the offshore business segment will actively assess and pursue available opportunities in the market," he said.
He added that the existing project continues to face pressure on schedule and cost arising from lockdowns in China, but mitigation efforts are being undertaken to minimise the impact.
In the meantime, the existing portfolio of long-term contracts will continue to support the financial performance of the offshore business segment, he said.
Meanwhile, the group remains cautious on the outlook of the marine and heavy engineering segment due to prolonged supply chain disruptions and volatile commodity prices despite high oil price supporting higher capital spending by energy majors.
More optimistically, the reopening of international borders augurs well for the marine sub-segment’s recovery with more demand for dry-docking activities as vessel owners gear up for improved seaborne trade requirements.
According to Yee, the China lockdown situation also continues to be advantageous as clients seek alternatives for their dry-docking activities.
However, the prevalent nationwide labour shortage could unfavourably affect timely execution of shipyard activities, he said.