MISC expects to incur losses in current financial year

KUALA LUMPUR (Nov 24): MISC BHD [] said it expects to incur losses in current financial year ending Dec 31, 2011 after it decided to exit its liner business operations, as the expected one-off costs to the income statement are estimated to be approximately US$400 million..

The company said this when reviewing its financial performance for the second quarter ended Sept 30, 2011.

MISC said its 3Q net profit fell 61.8% to RM140.96 million from RM369.36 million a year earlier, due mainly to depressed aframax freight rates in petroleum business, lower liftings in Liner business and high bunker costs.

The company said on Thursday that its revenue for the quarter fell 15.1% to RM2.62 billion from RM3.08 billion.

Earnings per share for the quarter fell to 3.20 sen from 8.30 sen in 2010, while net assets per share was RM5.40.

For the six months ended Sept 30, MISC’s net profit slumped to RM262.04 million from RM797.34 million, on the back of a decline in revenue to RM5.63 billion from RM6.36 billion in 2010.

Reviewing its performance, MISC said the decline in its revenue for the current quarter was mainly due to novation of certain heavy engineering projects to a jointly controlled entity.

“Secured long term contracts in LNG and Offshore businesses together with relatively steady revenue and margins in heavy engineering continue to provide stable income stream to the group to compensate the weak market conditions expected for the liner, petroleum and chemical businesses,” it said.

MISC had on March 2, 2011 announced the change of financial year end from March 31 to Dec 31.

The first new financial year would end on Dec 31, 2011 with a shorter 9-month period from April 1, 2011 to Dec 31, 2011.