KUALA LUMPUR: MISC Bhd
recorded a weaker performance in the fourth quarter of 2023 (4QFY23) on the back of lower operating profit in the offshore business segment due to lower construction progress and additional cost provisions.
Meanwhile, the group also reported higher vessel operating costs, which took a bite out of the gas assets and solutions segment's operating profit.
For the fourth quarter ended Dec 31, 2023, MISC registered a slightly lower net profit of RM627.3mil as compared to RM645mil in the year-ago quarter, which brought earnings per share to 14.1 sen compared to 14.4 sen.
Revenue in the quarter under review was RM4.28bil against RM4.17bil in the year-ago quarter due to higher revenue from new and ongoing projects for the heavy engineering sub-segment and higher charter rates in the gas assets and 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 quarter," said MISC in a statement.
Over the full financial year, MISC's net profit was RM2.12bil against RM1.82bil in FY22, while revenue was RM14.27bil compared to RM13.87bil in the previous year.
The board of directors declared a fourth interim dividend of 12 sen per share, payable on March 26, 2024.
On outlook, MISC said spot rates remained elevated due to a mild winter and European inventory buildup.
While softer market conditions are expected in the near term due to firm LNG fleet capacity growth, it said 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 and solutions segment is anticipated to remain stable, supported by its portfolio of long-term charters," it said.
Meanwhile, the near-term outlook for the petroleum shipping segment 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.
The outlook for the upstream oil and gas sector remains robust given high oil prices, continued global oil demand and increased capex spending.
"The demand for FPSOs is expected to remain favourable, driven by a healthy number of project sanctions worldwide, with Brazil leading as the largest market for FPSOs followed by West Africa," said MISC.
It added that the offshore business segment will selectively pursue new opportunities in the market while maintaining focus on executing current projects.
Additionally, the segment's existing portfolio of long-term contracts will continue to support its financial performance.
For the marine and heavy Engineering segment, the group said continuing high oil prices, coupled with sustained oil demand, is anticipated to drive further recovery in upstream capex spending.
