MISC (MISC) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 revenue and profit declined due to lower gas and offshore segment performance, but operational cash flow remained consistent and a third interim dividend of $0.08 per share ($86 million) was declared for December 2024.

• First oil was achieved from the Mero 3 FPSO (Marechal Duque de Caxias) in Brazil, with final acceptance from Petrobras in early November.

• Letter of intent signed with PETRONAS LNG for two newbuild LNG vessels on long-term charter, and contracts for two new LNG carriers to be delivered in 2027 were secured.

• Non-binding MoU signed with Bumi Armada to explore a potential merger of offshore business segments.

• Paid two interim dividends totaling 16.0 sen per share in 2024.

Financial highlights

• Q3 2024 revenue was USD 670 million (RM2,963.2 million), down 5% quarter-on-quarter and 8-11.9% year-on-year, mainly due to lower gas and offshore segment revenue.

• Profit after tax dropped 34% quarter-on-quarter and 7% year-on-year to USD 80 million (RM344.7 million); year-to-date profit after tax remains up 25%.

• Adjusted cash flow from operations was USD 290 million, stable quarter-on-quarter and down 1% year-on-year.

• MYR 4 billion impairment recognized in the gas segment as a non-recurring item in Q3.

• Healthy cash balance of MYR 1.7 billion (USD 1,703 million) as of Q3; balance sheet stable at MYR 14 billion.

Outlook and guidance

• LNG shipping market faces continued challenges from soft spot charter rates, high vessel deliveries, and subdued demand, with asset impairment risks persisting.

• New LNG vessel deliveries in 2025-2027 expected to strengthen future revenue.

• Petroleum shipping outlook remains steady, supported by long-term charters, strong Atlantic-Asia trade, and winter demand.

• Offshore business is supported by stable oil prices and long-term contracts, with focus on timely project completion and rising E&P CapEx through 2028.

• Marine & Heavy Engineering expects stable upstream capex and aims to mitigate supply chain and price volatility risks.