KUALA LUMPUR (Aug 24): MISC Bhd registered RM452.9 million net profit for the second quarter ended June 30, 2023 (2QFY2023) versus RM19.1 million net loss a year ago on the back of a smaller impairment of non-current asset in 2QFY2023.

This translated into an earnings per share of 10.1 sen against loss per share of 0.4 sen previously.

The energy shipping arm’s revenue was RM3.55 billion, a 10.5% higher than RM3.21 billion in 2QFY2022. The increase in revenue was contributed by improved freight rates in the petroleum and product shipping segment as well as higher revenue from ongoing heavy engineering projects.

It declared a second tax-exempt dividend of 10 sen per share amounting to RM446.4 million. The dividend, with an ex-date of Sept 11, will be paid on Sept 21.

MISC’s bourse filing on Thursday (Aug 24) showed impairment of non-current assets decreased to RM17.4 million from RM309.8 million. Operating profit increased by 15.3% to RM531.3 million from RM460.9 million due to higher margin on freight rates in the petroleum and product shipping segment coupled with higher profit in the offshore business segment.

For the cumulative six months ended June 30, 2023 (6MFY2023), MISC’s net profit more than doubled to RM1.07 billion from RM357.3 million in 6MFY2022. Six-month cumulative revenue advanced 9.02% to RM6.63 billion from RM6.08 billion.

It recorded higher cash flows generated from operating activities of RM3.3 billion for 6MFY2023 from RM1.08 billion a year earlier, mainly due to higher operating performance and receipt of charter prepayment for two floating storage units.

Additionally it recorded lower payments for cost relating to turnkey activities for the conversion of a floating, production, storage and offloading amounting to RM868.4 million compared with payments of RM1.29 billion in 6MFY2022.

Excluding the payments for the above turnkey activities, the group’s adjusted net cash generated from operating activities of RM4.15 billion was higher by 74.7% compared with RM2.37 billion in the corresponding period.

In view of the macroeconomic headwinds, MISC said its offshore business segment will remain focused on executing the projects in hand and undertake mitigation measures to minimise cost and schedule pressures.

On the heavy engineering segment, ongoing project execution remains challenging due to raw material price escalation and global supply chain disruption which resulted in additional costs and schedule impact, according to the company.

“Meanwhile, despite an anticipated increase in demand for dry-docking activities from a rise in seaborne trade requirements, the marine sub-segment is also expected to remain challenging given the stiff competition from Chinese shipyards further to the re-opening of China’s borders,” said MISC, adding that the group will continue to seek opportunities in the domestic and international markets, focusing on decarbonisation and renewable energy.

MISC finished up one sen or 0.14% to RM7.08, giving it a market capitalisation of RM31.6 billion.