MISC’s revenues were 4.6% higher in 2017, totalling RM*10,037.7m. Group operating profit was 10.2% higher at RM2,703.8m, but gross profit before was 28.2% lower at RM2,814.0m.
MISC said the increase in revenue was largely due to the consolidation of GKL at the beginning of May 2016 following completion of 50% of its equity buyback and higher variation works following GKL’s favourable adjudication decision. Furthermore, commencement of the construction revenue from Floating Storage and Offloading Vessel Benchamas 2, lease commencement of Marginal Marine Production Unit and two new LNG vessels also contributed to the increase in revenue.
Operating profit growth was driven by higher group revenue coupled with impairment of finance lease receivables made in the corresponding year in the Offshore segment.
Its gross profit before tax suffered due to impairment losses on ships, property, plant and equipment, offshore floating asset and other investment of RM687.5 million.
Looking forward, MISC said the oversupply of tonnage and cut in global oil production by OPEC in 2017 would weigh on its petroleum shipping segment in 2018. However, a smaller order book for tankers and robust oil demand projections amidst declining global crude inventory are expected to help improve its tanker supply-demand balance.
Its LNG shipping segment faces an ongoing tonnage oversupply situation and MISC expects the difficult market will persist in 2018. It cites a lack of short term positive indicators as reasons for challenging year ahead.
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