KUALA LUMPUR: MISC Bhd
's profitability took a hit in the third quarter ended Sept 30, 2024 (3QFY24), on the back of lower revenue in the gas assets and solutions, as well as offshore segments.
In the quarter under review, the group said net profit fell to RM338.9mil from RM430.4mil in the year-ago quarter, which translates to an earnings per share of 7.6 sen against 9.6 sen previously.
The group reported revenue of RM2.96bil, down from RM3.37bil.
According to the group, its gas assets and solutions business recorded a 21.7% drop in revenue year-on-year to RM674.2mil due to lower earning days from contract expiries and lower charter rates in the current quarter.
Subsequently, the segment's operating profit dove 39.8% to RM257.7mil from the previous corresponding quarter.
In the offshore segment, MISC said it incurred an operating loss of RM33.2mil as compared to an operating profit of RM58.1mil in 3QFY23 due to lower construction profit following lower project progress as well as increase in construction costs of the floating, production, storage and offloading (FPSO) unit.
Meanwhile, the group recorded higher operating profit of RM338.4mil in the petroleum and product shipping segment due to lower vessel operating costs.
The marine and heavy engineering segment also posted a higher operating profit of RM20.7mil as compared to an operating loss of RM100.3mil in the year-ago quarter, mainly owing to project close-out and the favourable impact from project hedging.
Over the nine months period to Sept 30, 2024 (9MFY24), MISC recorded a net profit of RM1.64bil on the back of revenue of RM9.93bil, as compared to a net profit of RM1.5bil on revenue of RM9.99bil in 9MFY23.
The group declared an interim dividend of eight sen per share, going ex on Nov 27, 2024, and payable on Dec 17, 2024.
On outlook, MISC said the gas assets and solutions unit faces potential asset impairment risks amid a weakened spot market, while geopolitical tensions could disrupt certain contractual arrangements.
"Despite these challenges, the gas assets and 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," it said.
MISC said the petroleum and 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.
Meanwhile, 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.
For the marine and heavy engineering segment, upstream capex spending is expected to remain stable amidst ongoing energy security concerns and geopolitical conflicts.
