MISC’s Q4 profits dip 11.44% on impairment provision

PETALING JAYA: MISC Bhd's net profit fell 11.44% to RM959.03 million for the fourth quarter ended December 31, 2014 versus RM1.08 billion in the previous corresponding period, mainly due to RM358.9 million in net impairment provision.
Revenue for the fourth quarter, however, rose 6.76% from RM2.14 billion to RM2.29 billion, supported by improved freight rates in petroleum business and commencement of finance lease of floating production, storage and offloading (FPSO) Cendor.
MISC has proposed a final dividend of 6 sen.
In a filing with the stock exchange, the shipping firm said though petroleum division registered better performance, its chemical business recorded lower revenue from a smaller fleet of operating vessels, while different phases of project construction caused a decline in heavy engineering revenue.
On the business prospects, MISC said it has found strength from sustained global oil production despite the falling global oil prices.
"Barring any material cutbacks in global oil production, the recent strength in the petroleum shipping could be sustained for the year," it noted.
For the chemical shipping segment, the group expects the market conditions to be relatively unchanged compared with 2014.
However, MISC said it will be a challenging year for the oil and gas services segment such as fabrication and construction, given the reduction in capital and operating expenditures by major oil companies in a low oil price environment.
"The group's heavy engineering business will draw on its present order book to sustain profitability during the year in conjunction with other cost management and operational excellence initiatives.
MISC's full-year net profit went up 5.7% to RM2.20 billion from RM2.09 billion a year ago on the back of RM9.30 billion in revenue versus RM8.97 billion it made a year ago.
Its share price was up 4 sen to RM7.74 last Friday.