KUALA LUMPUR (May 24): MISC Bhd’s net profit for the first quarter ended March 31, 2023 (1QFY2023) improved 62.83% to RM612.9 million or 13.7 sen per share, from RM376.4 million or 8.4 sen per share a year earlier, owing mainly to its petroleum and product shipping segment, as well as higher share of profit from joint ventures (JVs).

Revenue increased 7.36% to RM3.08 billion from RM2.87 billion in the prior year, according to the energy shipping group’s filing on Wednesday (May 24).

The company declared a first interim dividend of seven sen per share, with the ex-date of June 8, to be paid on June 22.

By segment, the petroleum and product shipping’s operating profit jumped more than nine times to RM312.5 million from RM32.2 million previously on higher margin on freight rates. Revenue grew 36.6% to RM1.21 billion from RM887.3 million.

MISC's share of profit from JVs rose to RM72 million from RM17.5 million previously.

The group's operating profit from the marine and heavy engineering segment rose 11% to RM7 million from RM6.3 million as revenue grew 18.8% to RM496.2 million from RM417.8 million.

Its offshore business revenue operating profit climbed 38% to RM166.7 million from RM120.8 million as the corresponding quarter’s operating profit was affected by higher construction costs of a floating, production, storage and offloading (FPSO) unit arising from the global supply chain issue and lockdowns in parts of China.

However, revenue for the offshore business segment fell 24.1% to RM584.6 million from RM770.1 million on lower revenue recognition from the conversion of FPSO.

On its prospects, MISC said the global upstream capital expenditure spending continues to increase this year, driven by high oil prices, strong cash flows and improved global oil demand.

“The outlook for the upstream oil and gas sector remains promising despite growing concerns on global recession and the world economy. This positive momentum will provide a huge uptick in the global FPSO market in the coming years, leading to a higher number of FPSO awards in the near term, coming from the South American region, led by Brazil followed by West Africa,” it said.

MISC’s share price fell eight sen or 1.09% to RM7.25 at noon break on Wednesday, translating into a market capitalisation of RM32.63 billion.