MISC to exit from container liner segment
MISC Bhd’s (MISC) plans to exit the container liner segment is expected to boost the company’s profits for next year and help contain its losses before tax by the time it is fully executed in June 2012, The Borneo Post reports.
MISC has plans to sell all 16 container vessels and other container related assets in the next six months, which may fetch US$340 million if the company is successful.
“The exit from the container business will help contain its losses before tax to US$64.2 million on revenue US$135.5 million as the group makes a clean break from the segment,” OSK Research Sdn Bhd (OSK Research) analyst Ahmad Maghfur Usman told The Borneo Post.
This was sharply lower than the estimated loss before tax of US$191.6 million this year.
Ahmad Maghfur also revealed that MISC had plans to sell all 16 container vessels and other container related assets in the next six months, which might fetch US$340 million if the company was successful.
He noted that a worse cast scenario would be see the value of the container assets drop 13 per cent to 25 per cent year-on-year due to the supply glut. So if the assets were auctioned, the proceeds could go as low as US$250 million.
The petroleum tanker business had also been a concern of the company’s, seeing that tanker rates had been expected to continue to be depressed.
“We are forecasting for MISC to remain mired in losses throughout financial year 2012 to the tune of an estimated loss before tax of US$190 million compared with the projected US$154 million for its nine-month financial year in financial 2011,” the analyst added.
Ahmad Maghfur observed that by annualising this estimated to strip off the non-month effect would give rise to a 13 per cent drop as rates started to tick up in the second half next year, when global economic picked up.
He believed that the glut in tanker supply would persist into 2013., although by then, rates were bound to be better relative to the current state as the imbalance between supply and demand eases.
“Meanwhile, earnings from chemical tankers will break even next year as demand outstrips supply,” the analyst predicted.
The company was noted to have been trading at an eight-year low, which OSK Research deemed to be the bottom of the stock’s trading range. The analyst believed that MISC’s book value next year would not get any lower on the back of its stable liquefied natural gas and offshore segment.
Other contributions would be from its tank terminal joint ventures, not forgetting the stronger order book from Malaysia Marine and Heavy Engineering Sdn Bhd at over RM3 billion were expected to collectively generate a profit before tax of US$718.9 million.
“This would help contain the US$274 million loss from the container and petroleum side next year,” Ahmad Maghfur forecasted.
OSK Research went on to peg an unchanged RM7.23 per share on MISC, premised on 1.5 times financial year 2012 book value per share.
MISC has plans to sell all 16 container vessels and other container related assets in the next six months, which may fetch US$340 million if the company is successful.
“The exit from the container business will help contain its losses before tax to US$64.2 million on revenue US$135.5 million as the group makes a clean break from the segment,” OSK Research Sdn Bhd (OSK Research) analyst Ahmad Maghfur Usman told The Borneo Post.
This was sharply lower than the estimated loss before tax of US$191.6 million this year.
Ahmad Maghfur also revealed that MISC had plans to sell all 16 container vessels and other container related assets in the next six months, which might fetch US$340 million if the company was successful.
He noted that a worse cast scenario would be see the value of the container assets drop 13 per cent to 25 per cent year-on-year due to the supply glut. So if the assets were auctioned, the proceeds could go as low as US$250 million.
The petroleum tanker business had also been a concern of the company’s, seeing that tanker rates had been expected to continue to be depressed.
“We are forecasting for MISC to remain mired in losses throughout financial year 2012 to the tune of an estimated loss before tax of US$190 million compared with the projected US$154 million for its nine-month financial year in financial 2011,” the analyst added.
Ahmad Maghfur observed that by annualising this estimated to strip off the non-month effect would give rise to a 13 per cent drop as rates started to tick up in the second half next year, when global economic picked up.
He believed that the glut in tanker supply would persist into 2013., although by then, rates were bound to be better relative to the current state as the imbalance between supply and demand eases.
“Meanwhile, earnings from chemical tankers will break even next year as demand outstrips supply,” the analyst predicted.
The company was noted to have been trading at an eight-year low, which OSK Research deemed to be the bottom of the stock’s trading range. The analyst believed that MISC’s book value next year would not get any lower on the back of its stable liquefied natural gas and offshore segment.
Other contributions would be from its tank terminal joint ventures, not forgetting the stronger order book from Malaysia Marine and Heavy Engineering Sdn Bhd at over RM3 billion were expected to collectively generate a profit before tax of US$718.9 million.
“This would help contain the US$274 million loss from the container and petroleum side next year,” Ahmad Maghfur forecasted.
OSK Research went on to peg an unchanged RM7.23 per share on MISC, premised on 1.5 times financial year 2012 book value per share.