MISC (MISC) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw disciplined execution and stable profitability despite a challenging environment, with revenue and profit after tax declining year-on-year due to lower activity in Gas and Marine & Heavy Engineering segments and vessel impairments in LNG.

• Cash flow from operations surged to $374 million (RM2,375.1 million for H1), more than doubling quarter-over-quarter and up 31% year-on-year, driven by petroleum and offshore segments and higher customer collections.

• Strategic progress included fleet rejuvenation, new energy initiatives, decarbonization, and major joint ventures for LCO₂ carriers.

• Second interim dividend of MYR 0.08 per share (USD 85 million, 8 sen per share) declared, reflecting commitment to shareholder returns.

• Significant events included delivery of the first LNG carrier for QatarEnergy, new subsidiaries and JVs, and completion of FPSO Kikeh acquisition.

Financial highlights

• Group revenue for Q2 2025 was $631 million (RM2,721.3 million), down 10% year-on-year, mainly due to lower Marine & Heavy Engineering and Gas segment contributions.

• Operating profit was $176 million (RM755.2 million), up 5% year-on-year in USD terms but down 4.7% in RM terms; profit after tax was $110 million (RM469.4 million), down 9% year-on-year, mainly due to higher impairment provisions in the Gas segment.

• Cash flow from operations improved 31% year-on-year and over 100% sequentially.

• Net cash generated from operating activities for H1 2025 was RM2,375.1 million, up 52% year-on-year.

• Gross margin for Q2 2025 was 35.3%, up from 29.7% in Q2 2024.

Outlook and guidance

• LNG charter rates expected to remain soft through 2025 due to fleet expansion and subdued demand, with gradual recovery from 2026 as new liquefaction capacity comes online.

• Crude tanker markets projected to remain stable and healthy, supported by OPEC+ exports and limited fleet growth.

• FPSO demand expected to stay strong through 2028, supported by rising offshore CapEx and global energy demand.

• Marine & Heavy Engineering faces challenges from trade tensions and geopolitical conflicts but focuses on diversification and efficiency.

• Continued focus on disciplined growth, operational resilience, and innovation.