MISC manages 10% 2016 profit rise but slows in Q4

For the fourth quarter, the slide in revenue was even more dramatic, falling by almost a quarter to MYR2.52bn from MYR3.31bn and as a result net profit also fell to MYR499.7m from MYR752.4m previously, the company said in a stock market announcement.

Among the segments LNG saw revenue fall 12% to MYR2.48bn mainly due to a smaller fleet of vessels following disposal of two vessels in November 2015 and lower charter rates earned on new contracts in 2016. LNG however also recognised revenue in the current year from commencement of a newly delivered vessel in the fourth quarter.

Segment profit was also hit, falling 15% to MYR1.49bn mainly from higher depreciation following the change in estimated useful life of vessels in January 2016, MISC said.

The petroleum segment saw flat revenue growth of MYR4.75bn as the US Dollar strengthened against the local currency. However, segment operating profit fell 44% to MYR327.0m from MYR580.9m previously, mainly from lower profit margin and higher depreciation a change in estimated useful life of vessels in January 2016.

The key offshore segment however saw revenue rise 6% to MYR1.16bn on consolidation of revenue from the GKL offshore project from May 2016 which outweighed revenue from two Engineering, Procurement and Construction (EPC) projects completed in the previous corresponding period.

The contributions from the GKL project helped operating profit spike 49% to MYR375.4m from MYR252.3m in the previous corresponding period.

Finally as expected, the Heavy Engineering segment saw revenue plunge by half to MYR1.19bn due to fewer and lower backlog and order intake at its Malaysia Marine and Heavy Engineering (MMHE) unit as was seen in the subsidiary's results earlier in the week.

Segment profit also plunged 89% to just MYR13.1m from MYR123.7m as a result of operating losses incurred from lower revenue in its Heavy Engineering sub-segment. However, the Marine sub-segment recorded higher operating profit despite lower revenue, MISC noted.

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