MISC (MISC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined year-over-year and quarter-over-quarter due to LNG market softness and project timing, but profits and cash flow improved, driven by strong performance in petroleum and heavy engineering segments, and cost recovery claims.

• Dividend payout for Q2 was maintained at MYR 0.08 per share (USD 76 million), consistent with Q1, and up 12% year-over-year.

• FPSO Marechal Duque de Caxias (Mero 3) reached 97% completion and arrived offshore Brazil, but first oil is delayed to late Q3 or early Q4 due to a riser issue.

• MHB secured a second offshore HVDC platform contract, strengthening its renewable energy segment.

• AET received the Jones F. Devlin Safety Award for 47 vessels, highlighting strong safety standards.

Financial highlights

• Q2 2024 revenue was $703 million (RM3,329.4 million), down 10% year-over-year and 9% sequentially, mainly due to LNG market softness and project stage timing.

• Profit before tax was $132 million (RM588.3 million), up 7% year-over-year, with operating profit rising 49.1% to RM792.2 million due to cost recovery and improved margins.

• Profit after tax for Q2 was $121 million (RM540.9 million), up 73% year-over-year, but down sequentially due to absence of prior quarter's one-off gains.

• Cash flow from operations reached $289 million (RM1,562.6 million for H1), up 33% quarter-over-quarter but down year-over-year due to prior year prepayments.

• Total assets stood at RM66,370.1 million as of June 2024, with equity attributable to shareholders at RM40,773.5 million.

Outlook and guidance

• LNG shipping market outlook remains positive, with expected spot rate increases due to seasonal demand and winter restocking.

• Petroleum shipping rates remain resilient, supported by long-haul exports and low fleet growth.

• Offshore segment anticipates steady upstream capex growth and robust FPSO demand, especially in South America and Asia Pacific.

• Marine & Heavy Engineering segment aims to capitalize on low-carbon opportunities and mitigate supply chain risks.