KUALA LUMPUR: MISC Bhd's net profit fell 21.3 per cent to RM338.9 million in the third quarter ended Sept 30, 2024 (3Q24) from RM430.4 million a year ago, dragged by lower charter rates for natural gas carriers and increased vessel operating costs.
Revenue for the quarter declined to RM2.96 billion from RM3.37 billion previously due to lower billings in its offshore construction business.
The group registered a lower earnings per share of 7.60 sen compared to 9.60 sen in 3Q23, according to its filing to Bursa Malaysia today.
Nevertheless, MISC registered a higher net profit of RM1.64 billion in the first nine months ended Sept 30, 2024 (9MFY24) compared to RM1.5 billion a year ago on higher margin in the petroleum & product shipping segment and recognition of cost recovery claims.
Revenue for the period was down to RM9.93 billion from RM9.99 billion.
The group also declared an interim dividend of eight sen per share, with the ex-date on Nov 27, 2024, and payment on Dec 17, 2024.
On outlook, MISC said in the liquefied natural gas (LNG) shipping market, spot rates remained moderate in 3Q24 amidst subdued LNG demand in Asia and elevated inventory levels in Europe, keeping rates below previous years' levels.
It added that the outlook for spot rates moving into the fourth quarter and beyond remains softer, driven by a high number of vessel deliveries, limited additional liquefaction capacity, and moderate anticipated demand in Europe.
"The segment also faces potential asset impairment risks amid a weakened spot market, where softer rates may affect the long-term value of assets."Furthermore, heightened geopolitical tensions could disrupt certain contractual arrangements which may have an adverse financial impact," it noted.
Despite these challenges, MISC said the Gas Assets & 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.
Meanwhile, MISC said the Petroleum & 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.
It noted that 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.
Moving forward, it said the offshore business segment will actively pursue new opportunities in the market while maintaining a strong focus on the timely and efficient completion of existing projects to mitigate potential cost overruns.
For the Marine & Heavy Engineering segment, the group said upstream capex spending is expected to remain stable amidst ongoing energy security concerns and geopolitical conflicts.
"The segment will remain focused on improving its contracting strategies to mitigate risks associated with supply chain disruptions and price volatility in view of a persistently uncertain operating environment," it noted.