MISC Group, a Malaysia-based provider of energy-related maritime solutions and services, wrapped up 2019 with both profit and revenue increases.
MISC’s profit after tax rose by almost 12 percent to MYR 1.44 billion (USD 344 million) in 2019 from MYR 1.28 billion seen in 2018.
Group operating profit for the year ended December 31, 2019, stood at MYR 1.93 billion, an increase of 31.6 percent compared to MYR 1.47 billion reported in 2018.
Revenue was up by 2.1 percent and amounted to MYR 8.96 billion in 2019, against MYR 8.78 billion posted in 2018.
As explained, the increase in revenue was mainly due to the higher number of operating vessels in the LNG segment following the redeployment of vessels previously on charter suspension and acquisition of two LNG carriers in December 2018 and January 2019.
Higher revenue from dry docking services and conversion works from the heavy engineering segment also contributed to the higher revenue in the current year.
“We are very pleased indeed with our financial performance for 2019. Our performance is clearly reflected in our ability to generate a 36.1% increase in operating cash flow year-on-year,” Yee Yang Chien, President/Group CEO of MISC, said.
“(w)e continue to see new investment opportunities before us, despite the backdrop of uncertain global growth outlook. We intend to ride this tailwind with the mission to further accelerate our growth in 2020,” Yee added.
Although the tanker market is expected to remain firm in 2020, it could face short-term headwinds if the coronavirus outbreak is not contained or if the situation escalates, MISC believes.
In the LNG shipping segment, liquefaction expansion in North America and the Middle East is expected to create a higher demand for ships, supporting charter rates increase. MISC said that its present portfolio of long-term charters will underwrite the steady performance of its LNG business segment, and the two long-term contracts secured in Q4 2019 will provide growth in the future.
In addition, the floating production system market will likely remain robust with an increasing number of contract awards in the next few years, and MISC’s offshore business unit will continue to assess the merit of pursuing these opportunities. The unit’s existing portfolio of long-term contracts will continue to support the stable financial performance of the offshore business segment, according to the company.
While there is an increase in offshore activities, the heavy engineering segment remains prudent on the outlook in the near term amidst uncertainties on the timing of capital spending by major oil and gas players. Meanwhile, the segment is cautiously optimistic on the outlook for the marine business in view of the expected global LNG expansion and expects no further deferment of dry docking activities related to IMO 2020. But the segment remains committed to replenish its order book by expanding its footprint in various geographical areas and diversifying into new business opportunities, MISC explained.
As of December 31, 2019, MISC Group’s fleet consisted of more than 100 owned and in-chartered LNG, petroleum and product vessels, fourteen floating production systems (FPS) as well as 2 LNG floating storage units (FSU). The fleet has a combined deadweight tonnage capacity of more than 13 million tons.