MISC (MISC) Q1 2025 earnings summary

Executive summary

• Group achieved profitability in Q1 2025, with operating profit improving quarter-on-quarter and year-on-year, driven by a one-time gain in the Offshore segment and stable core business performance.

• Revenue for Q1 2025 was $633 million (RM2,816.1 million), down 18% year-on-year and 16% quarter-on-quarter, mainly due to reduced activity in Marine & Heavy Engineering and lower gas segment revenue.

• Profit after tax was $160 million (RM711.6 million), a significant turnaround from a $91 million loss in Q4 2024 and comparable year-on-year.

• A first interim dividend of MYR 0.08 per share (8.0 sen) was declared, totaling MYR 357 million, reflecting continued shareholder returns.

• Strategic priorities advanced in line with the 2030 Ambition, including fleet rejuvenation, decarbonization initiatives, and new contract wins.

Financial highlights

• Group revenue for Q1 2025 was $633 million, down 18% year-on-year and 16% quarter-on-quarter, mainly due to reduced activity in Marine & Heavy Engineering and lower gas segment revenue.

• Operating profit rose to $193 million (RM857.2 million), up 3% year-on-year and more than double quarter-on-quarter, driven by a one-time gain from a new FPSO lease contract.

• Profit after tax was $160 million (RM711.6 million), a significant turnaround from a $91 million loss in Q4 2024 and flat year-on-year.

• Cash flow from operations improved year-on-year by $133 million and net cash generated from operating activities was RM773.1 million, but fell 52% quarter-on-quarter due to lower collections and higher payments.

• Gearing ratio increased to 0.44x due to higher debt, but net gearing remained stable as cash balances also rose.

Outlook and guidance

• LNG shipping spot rates are expected to remain subdued in 2025 due to vessel oversupply and project delays, with recovery anticipated from 2026 as new liquefaction capacity comes online.

• Modern LNG vessels are expected to benefit from market recovery, while older vessels face declining rates.

• Petroleum shipping outlook is mixed, with VLCCs expected to outperform mid-size tankers; rates remain above 10-year averages.

• Offshore upstream capital spending is projected to grow at a CAGR of 8.3% to $26 billion by 2029, supporting a resilient long-term outlook for the offshore segment.

• Marine & Heavy Engineering segment is cautious due to geopolitical tensions but is pursuing opportunities in new energy and high-value repair projects.