Malaysian LNGC player, MISC, part of the Petronas conglomerate, described LNGC spot rates as moderate in the third quarter of this year amidst subdued LNG demand in Asia and elevated inventory levels in Europe, keeping rates below previous years' levels.
The spot rate outlook moving into the fourth quarter of this year and beyond was softer, MISC said in its third quarter results report, driven by a high number of vessel deliveries, limited additional liquefaction capacity, and moderate anticipated demand in Europe.
LNGC owners also faces potential asset impairment risks amid a weakened spot market, where softer rates may affect their long-term value. Furthermore, heightened geopolitical tensions could disrupt certain contractual arrangements, which may have an adverse financial impact.
Despite these challenges, MISC said that its Gas Assets & Solutions segment will continue to pursue opportunities to mitigate impacts on operating income, including repurposing vessels into floating solutions and redeploying them to charterparties where feasible.
Zahid Osman, MISC President and Group CEO said, “Our third-quarter results reflect the continued dedication and resilience of the MISC Group, and I am proud of our team’s commitment to ensuring steady progress and growth in the core businesses, even amid market complexities.
“We are committed to staying responsive to market dynamics and offering integrated value solutions to our customers. Moving forward, our focus is on delivering steady growth and value across our key segments by strengthening our financial framework and seizing opportunities that bring greater value to our stakeholders,” he said.
Group revenue of RM2,963.2 mill was RM401.9 mill or 11.9% lower than recorded in 3Q23, mainly due to lower earning days from contract expiries and lower charter rates in the Gas Assets & Solutions segment, coupled with lower recognition of revenue from the conversion of a an FPSO, following lower project progress in the Offshore Business segment.
The decrease was however mitigated by higher revenue from ongoing Heavy Engineering projects.
Operating profit for 4Q24 of RM542.8 mill was RM107.1 mill or 16.5% lower than the corresponding quarter's profit of RM649.9 mill, mainly due to lower revenue and higher vessel operating costs in the Gas Assets & Solutions segment.
Profit attributable to equity holders of the corporation of RM338.9 mill was RM91.5 mill or 21.3% lower than the corresponding quarter’s profit of RM430.4 mill contributed by the lower operating profit mentioned above.
For the first nine months of this year, Group revenue of RM9,930.9 mill was comparable to the corresponding nine month period last year, which was RM9,993.4 mill,.
Operating profit for the period of RM2,217 mill was RM210.3 mill or 10.5% higher than the corresponding period’s profit of RM2,006.7 mill, contributed by higher margin in the Petroleum & Product Shipping segment.
The Gas Assets & Solutions segment also recorded lower profit from lower earning days and charter rates coupled with higher vessel operating costs.
Profit attributable to equity holders of RM1,639.7 mill was RM143.5 mill or 9.6% higher than the corresponding period’s profit of RM1,496.2 mill, due to the higher operating profit as mentioned above coupled with lower impairment provisions recognised in the current period.
