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MISC Q3 profit flat on provisions

MISC Q3 profit flat on provisions
Malaysian shipping company MISC third quarter revenue rise 15% to MYR2.51bn ($587.7m) from MYR2.18bn previously on improved freight rates in the petroleum business, the company said in a stock market announcement.

A MYR232.3m provision however meant that net profit was almost flat at MYR504.1m from MYR497.16m previously.

For the first nine months, revenue rose 8% to MYR7.6bn from MYR7.01bn previously while net profit rose 34% to MYR1.78bn from MYR1.33bn in the previous corresponding period.

Although overall energy shipping segment revenue rose 35% to MYR1.99bn, a smaller fleet of operating vessels and lower earning days however caused declines in chemical and LNG businesses’ revenue.  

Segment profit rose 26% to MYR552.2m from MYR439.1m previously. Petroleum business recorded higher profit from increase in revenue while chemical business showed a slight profit rise in the current quarter from improvement in charter rates. The LNG business, however, recorded lower operating profit from lower revenue in the current quarter.  

The other energy business, which includes offshore engineering and tends to have more lumpy results, saw revenue fall 29% to MYR381mfrom MYR533.2m in the previous corresponding quarter, mainly due to different phases of project construction of on-going projects in Heavy Engineering and lower reimbursable revenue in offshore business in the current quarter, MISC explained.
Operating profit for this segment likewise fell 58% to MYR18.1m from MYR43m previously, mainly due to lower segment revenue and higher additional costs to complete an on-going project in the heavy engineering business.  

The petroleum shipping segment continues to enjoy the benefits of market strength in the first half of 2015 into the third quarter of the year, despite the quarter being a seasonally weaker period. This segment is likely to end the year on an equally strong note given the start of the winter season in the Northern Hemisphere which is seasonally positive for this segment.  

The steady performance of the LNG shipping and offshore business segments of the past nine months will continue into the last quarter of the year on the back of the portfolio of long term contracts both business segments have in place.   

However, the outlook and prospects of the upstream oil and gas industry is projected to remain poor with the prolonged weakness in oil price.