- MISC Group’s revenue for the first half of 2024 increased by 5.1%, with operating profit rising by 23.4% due to improved project performance and higher margins in key segments.
- The outlook for LNG and petroleum shipping remains favorable, with expected growth in spot rates and stable income from long-term charters despite some market fluctuations.
- The offshore segment is poised for growth, driven by demand for FPSOs, while the Marine & Heavy Engineering segment aims to capitalize on both traditional and clean energy opportunities amidst ongoing geopolitical risks.
MISC Group’s performance in the second quarter of 2024 showcased resilience and adaptability in a challenging market. According to MISC President and CEO Zahid Osman, the Group’s strategic focus on operational excellence helped deliver commendable results while staying committed to energy transition efforts.
Revenue Performance
Zahid Osman, MISC President and Group CEO said, “MISC Group’s performance in the second quarter of 2024 reflects our strategic resilience and adaptability in navigating complex market conditions. Despite facing some headwinds, our diversified portfolio and focus on operational excellence have enabled us to achieve commendable results. As we progress through the year, we remain dedicated to leveraging growth opportunities across our key segments, ensuring that we continue to deliver sustainable value for our stakeholders while advancing our commitment to a just energy transition.”
The Group’s revenue for Q2 2024 was RM3,329.4 million, which was 6.2% lower than the same quarter in 2023. The decline was primarily due to reduced revenue in Marine & Heavy Engineering and Gas Assets & Solutions.
However, for the first six months of 2024, the Group’s revenue increased by 5.1% to RM6,967.7 million. This was driven by ongoing Heavy Engineering projects and higher freight rates in Petroleum & Product Shipping.
Profit Growth
MISC Group’s operating profit for Q2 2024 increased by 49.1% to RM792.2 million, compared to the corresponding quarter in 2023. This growth was driven by higher earnings in Marine & Heavy Engineering and improved margins in Petroleum & Product Shipping.
For the first half of 2024, operating profit rose by 23.4% to RM1,674.2 million, aided by cost recovery claims and improved project performance.
Profit attributable to equity holders for Q2 2024 reached RM540.9 million, a 19.4% increase from the same period in 2023. For the first half of 2024, profit rose by 22.0% to RM1,300.8 million, largely due to higher operating profit and lower impairment provisions.
Despite strong profits, cash flows from operating activities for the first half of 2024 were RM1,562.6 million, a 52.3% decrease from the same period in 2023. This decline was due to the one-off receipt of charter hire prepayments for two Floating Storage Units in the previous year.
Shipping Market
LNG shipping rates were subdued during Q2 2024 but showed slight improvement by June, driven by rising demand in Asia and Europe. The outlook remains favorable, with spot rates expected to increase due to seasonal demand and winter restocking.
The Gas Assets & Solutions segment is expected to sustain stable income through its long-term charter portfolio.
The petroleum shipping market remained resilient, particularly for mid-sized tankers, despite a softening in VLCC rates due to weaker imports from China. The outlook remains positive, supported by increasing long-haul exports from the US, Brazil, and Guyana, with low fleet growth.
MISC’s Petroleum & Product Shipping segment is expected to continue delivering stable income from long-term charters and spot market opportunities.
Business Prospects
The offshore business segment is poised for steady growth, driven by global demand for Floating Production Storage and Offloading (FPSO) units, especially in South America, West Africa, and the Asia-Pacific region.
MISC’s existing portfolio of long-term contracts and ongoing projects will support financial performance while the segment explores new opportunities in the market.
Upstream capex spending remains stable due to firm oil prices, providing opportunities for the Marine & Heavy Engineering segment.
In addition to traditional energy projects, the segment aims to capitalize on increasing demand for low-carbon solutions from clean energy sectors. However, supply chain disruptions and price volatility remain key risks in this volatile geopolitical environment.
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Source: MISC
