Q3 profit of Msia's MISC jumps to RM944.5m
Malaysia's MISC Bhd, the world's biggest owner of liquefied natural gas (LNG) tankers, said third-quarter profit rose helped by ship sales and demand for oil and gas facilities.
Good business: Ship sales and demand for oil and gas facilities helped MISC's net income climb in third quarter
Net income climbed to RM944.5 million (S$410.8 million), or 25.4 sen a share, in the three months ended Dec 31, from RM803.2 million, or 21.6 sen, a year earlier, the Kuala Lumpur-based company said in a statement yesterday. Sales rose to RM2.83 billion from RM2.77 billion.
MISC's marine and heavy engineering unit is benefiting from exploration for new oil and gas fields in Malaysia, South-east Asia's second-largest energy producer.
The price for building and renting deepwater rigs has nearly doubled in less than a decade.
'Deepwater oil and gas facility fabrication will start to play a bigger role in its earnings,' said Christopher Eng, an analyst at OSK Research Sdn in Kuala Lumpur, who upgraded his rating on MISC stock to 'buy' from 'neutral'.
Shares of MISC, the world's third-largest shipping company by market value, closed 10 sen down at RM8.90 yesterday in Kuala Lumpur. The benchmark Kuala Lumpur Composite Index fell 0.3 per cent.
MISC owns 21 container ships, 13 chemical tankers, 45 oil tankers and 23 LNG carriers, according to its website.
It has outstanding orders for a container ship, eleven oil tankers, eight chemical tankers and six LNG carriers, the website added.
The Baltic Dirty Tanker Index, which is a measure of rates for various size vessels on several routes around the world, averaged 1,198 points in the quarter ended December, 42 per cent lower than the average measure of 2081 a year earlier.
Container shipment rates have also fallen since the second half of 2005, as shipyards were set to deliver a record number of vessels last year, adding to shipping capacity.
For the nine months ended Dec 31, profit fell to RM2.15 billion from RM2.16 billion a year earlier.
MISC, a unit of state oil and gas company Petroliam Nasional Bhd, is the world's largest single owner and operator of LNG tankers and the second largest owner of Aframax tankers, according to its website.
The company's oil tanker fleet is predominantly employed delivering crude to US oil refineries. Its LNG carriers ship Malaysian gas to customers in Japan and South Korea.
A recovery in tanker rates and the delivery of three new tankers this year will boost earnings in 2008, said Mr Eng of OSK Research.
'Tanker rates will begin to recover ahead of some environmental regulations that require scrapping of older single-hull ships,' said Mr Eng.
'The impact from the new LNG vessels will also kick in quite strongly in 2008, so their average LNG rate should go up,' he added.
MISC's AET Inc unit in December confirmed an order for two Aframax tankers from Tsuneishi Corp of Japan for US$130 million.
The tankers, to be delivered in 2011, will help increase its market share in crude oil shipping, MISC said at the time.
The company will spend RM20 billion in the next five to six years expanding its fleet, Malaysia's Business Times reported in November, without saying from where it got the information.
MISC received its eighth very large crude carrier from Universal Shipbuilding Corp of Japan on Oct 31.
The company in July signed as much as US$550 million in contracts to charter ships to Malaysia LNG Sdn, a unit of Petroliam Nasional. - Bloomberg
Good business: Ship sales and demand for oil and gas facilities helped MISC's net income climb in third quarter
Net income climbed to RM944.5 million (S$410.8 million), or 25.4 sen a share, in the three months ended Dec 31, from RM803.2 million, or 21.6 sen, a year earlier, the Kuala Lumpur-based company said in a statement yesterday. Sales rose to RM2.83 billion from RM2.77 billion.
MISC's marine and heavy engineering unit is benefiting from exploration for new oil and gas fields in Malaysia, South-east Asia's second-largest energy producer.
The price for building and renting deepwater rigs has nearly doubled in less than a decade.
'Deepwater oil and gas facility fabrication will start to play a bigger role in its earnings,' said Christopher Eng, an analyst at OSK Research Sdn in Kuala Lumpur, who upgraded his rating on MISC stock to 'buy' from 'neutral'.
Shares of MISC, the world's third-largest shipping company by market value, closed 10 sen down at RM8.90 yesterday in Kuala Lumpur. The benchmark Kuala Lumpur Composite Index fell 0.3 per cent.
MISC owns 21 container ships, 13 chemical tankers, 45 oil tankers and 23 LNG carriers, according to its website.
It has outstanding orders for a container ship, eleven oil tankers, eight chemical tankers and six LNG carriers, the website added.
The Baltic Dirty Tanker Index, which is a measure of rates for various size vessels on several routes around the world, averaged 1,198 points in the quarter ended December, 42 per cent lower than the average measure of 2081 a year earlier.
Container shipment rates have also fallen since the second half of 2005, as shipyards were set to deliver a record number of vessels last year, adding to shipping capacity.
For the nine months ended Dec 31, profit fell to RM2.15 billion from RM2.16 billion a year earlier.
MISC, a unit of state oil and gas company Petroliam Nasional Bhd, is the world's largest single owner and operator of LNG tankers and the second largest owner of Aframax tankers, according to its website.
The company's oil tanker fleet is predominantly employed delivering crude to US oil refineries. Its LNG carriers ship Malaysian gas to customers in Japan and South Korea.
A recovery in tanker rates and the delivery of three new tankers this year will boost earnings in 2008, said Mr Eng of OSK Research.
'Tanker rates will begin to recover ahead of some environmental regulations that require scrapping of older single-hull ships,' said Mr Eng.
'The impact from the new LNG vessels will also kick in quite strongly in 2008, so their average LNG rate should go up,' he added.
MISC's AET Inc unit in December confirmed an order for two Aframax tankers from Tsuneishi Corp of Japan for US$130 million.
The tankers, to be delivered in 2011, will help increase its market share in crude oil shipping, MISC said at the time.
The company will spend RM20 billion in the next five to six years expanding its fleet, Malaysia's Business Times reported in November, without saying from where it got the information.
MISC received its eighth very large crude carrier from Universal Shipbuilding Corp of Japan on Oct 31.
The company in July signed as much as US$550 million in contracts to charter ships to Malaysia LNG Sdn, a unit of Petroliam Nasional. - Bloomberg