MISC said the net loss was mainly due to impairment of ships, higher finance costs from borrowings, and a lower share of profit from joint ventures in the current quarter.
According to the company’s filing with Bursa Malaysia today, impairment of non-current assets brought a pre-tax loss of RM309.8 million in Q2 versus a pre-tax loss of RM42 million in the same period last year.
Its pre-tax loss from finance costs also ballooned, to RM147.5 million from RM97.9 million previously, while its share of joint ventures slipped into a pre-tax loss of RM10.3 million from a pre-tax profit of RM44.7 million previously.
However, the international energy-related maritime solutions and services provider posted a higher revenue of RM3.21 billion against RM2.35 billion previously, contributed by higher income from all segments.
The company also declared a second tax-exempt dividend of seven sen per share, payable on Sept 14, 2022.
For the cumulative six months ended June 30, 2022, MISC saw its net profit narrowed to RM357.3 million from RM968.60 million in the same period last year, while revenue widened to RM6.08 billion from RM4.89 billion previously.
President and group CEO Yee Yang Chien said accounting impairment of some of the company’s older liquefied natural gas (LNG) carriers, as well as adjustments made to the finance lease accounting for its ongoing Mero 3 floating production storage and offloading (FPSO) project that is presently under execution have had a negative impact on the overall Q2 performance.
“Moving forward, we remain focused on ensuring the successful execution of our ongoing projects and consistently delivering our solutions safely, efficiently and reliably to support the needs of the global maritime ecosystem,” he said.
According to the group, the outlook for the LNG shipping market remained positive due to strong global demand for LNG, especially from Europe as a result of the push toward energy security.
It said demand for FPSOs is expected to stay firm with increasing project awards expected over the next few years, as the upstream oil and gas sector continues to remain optimistic, backed by the combination of high oil prices, improved global oil demand and increased capital expenditure spending.
However, it noted that the petroleum shipping market rates for very large crude carriers (VLCCs) remained weak due to the easing of premiums in Russian cargoes and lower oil supply due to production disruptions in some countries.
“The marine and heavy engineering segment remains cautiously optimistic on the outlook due to prolonged supply chain disruptions and volatile commodity prices, despite continuing high oil prices that will further support higher capital spending by energy majors,” it added.