MISC Sees Tough LNG Shipping Market in 2018

Leading LNG shipowner MISC, controlled by Malaysian state gas and oil giant Petronas, said February 13 that difficult market conditions in the LNG shipping segment are expected to continue in 2018 thanks to the ongoing tonnage oversupply situation.

“The LNG shipping segment faces an ongoing tonnage oversupply situation and the difficult market will persist in 2018. Lack of short term positive indicators suggests another challenging year. The Group continues to rely on its present portfolio of long term time charters to provide it the stability of profits and cashflow during the year," it said in an annual results statement. However it added that two new LNG carriers will join its fleet in 2018 "providing a source of income growth for the segment.”

MISC reported a pre-tax group profit for full year 2017 of ringgit 2.004bn ($508mn) was 28.8% lower than in 2016 - chiefly due to impairment losses on ships, property, plant and equipment, offshore floating asset and other investments of ringgit 687.5mn, offset by a net gain on acquisition of subsidiaries of ringgit 856.2mn, a gain on disposal of a subsidiary of ringgit 73.6mn, and recognition of intangibles of ringgit 47.5mn, and a higher share of profit from joint ventures.

Revenues for full year 2017 were ringgit 10.03bn, 4.6% higher than in 2016. Operating profit for the year was ringgit 2.7bn, up 10.2% year on year.

During October-December 2017, MISC’s pre-tax profit was a slender ringgit 42mn, less than a tenth of the year-before quarter’s pre-tax profit of ringgit 504.4mn, while revenues were ringgit 2.43bn, down 3.3%, with operating profit of ringgit 627mn also lower mainly due to impairment of receivables and higher LNG vessel operating costs.