KUALA LUMPUR: CIMB Securities Sdn Bhd expects the latest MISC Bhd’s recent liquefied natural gas (LNG) carriers construction contracts from Petroliam Nasional Bhd (Petronas) to contribute RM47-120 million to its core net profit from the financial year 2027 (FY27).
The brokerage firm also projects annual earnings before interest, taxes, de-preciation, and amortisation of RM265 million from the same period.
In a research note yesterday, CIMB Securities highlighted that MISC’s strong balance sheet, with a low net gearing ratio of 0.2x, ensures that financing for the construction of the two new LNG carriers is not expected to pose any issues.
On Monday, MISC signed a letter of intent with Petronas LNG Sdn Bhd for long-term contracts involving two newly built LNG carriers, set to last for 15 years, starting in 2027.
However, specific details such as contract value, capacity, and the exact start date were not disclosed.
“We are maintaining our earnings forecasts, discounted cash flow-based target price of RM10.25 per share, and ‘buy’ rating, pending further updates from the management,” CIMB Securities said.
In a related development, MISC also reached an agreement with Petronas for the early termination of time charters for three existing steam-powered LNG carriers: Seri Ayu, Seri Angkasa, and Seri Begawan (Seri AAB).
These vessels will be redelivered on their 20th anniversary in 2027/2028, with MISC receiving compensation for early termination.
MISC also secured extensions for two existing LNG carriers, Seri Alam and Seri Amanah (Seri AA), which will continue to operate until March 31, 2028, after their current contracts expire in 2025 and 2026.
“The rationale behind the early termination of the Seri AAB time charters remains unclear. However, MISC aims to modernise its fleet with new LNG carriers to cut greenhouse gas emissions by 2030.
With the latest contract, MISC now has 19 LNG carriers under construction, further strengthening its shipping portfolio.
Four vessels are scheduled for delivery in 2025, 13 in 2026, and the remaining two by 2027. Notably, 11 of these LNG carriers are chartered to Qatar Energy.
“We project that the potential daily charter rate for these contracts will be in the range of US$110,000-120,000 (RM457,000-499,000) per day, considering the vessel capacity of 174,000 cubic metres, similar to the other new builds and its long-term nature,” CIMB Securities stated. – Bernama
