MISC Berhad has seen its third-quarter net profit more than double compared to a year ago on the back of red-hot tanker markets.
The Malaysian tanker owner booked a profit after tax of MYR 822m ($181m), compared with the MYR 391m achieved 12 months earlier, figures released Thursday show.
Group revenue of MYR 3.6bn was MYR 922m, or 34.3%, higher than the quarter ended 30 September 2021 revenue of MYR 2.7bn.
MISC’s tanker arm posted an operating profit of MYR 470.7m turning around a loss of MYR 8.3m seen in the corresponding period in 2021.
The shipowner attributed the turnaround to a one-off compensation for a contract renegotiation and higher freight rates in the current quarter.
“The petroleum shipping market rates have seen improvements since the last quarter with average tanker rates strengthening, supported by rebounding oil production, ongoing recovery from Covid-19 impacts and shifts to longer-haul trade flows arising from the Ukraine invasion,” MISC said.
“In addition, VLCC rates continue to strengthen in September due to the increase of US crude flows to the Far East and South Asia.
“Notwithstanding this, upcoming Opec+ production curbs are anticipated to keep oil supply tight this winter, capping any rise in freight rates,” MISC added.
However, the shipowner said downside risks to the demand outlook remains, with a lack of improvement in Chinese oil demand and a slowing global economy.
Amidst this volatile backdrop, MISC said its tanker arm has been “continuing to improve the quality of its income and balance sheet through its shuttle tanker business and asset rejuvenation with greener-fueled newbuildings”.
MISC’s LNG business saw a 13.4% year-on-year increase in operating profit to MYR 355.1m on the back of higher revenue coupled with lower operating costs.
“Spot rates continued to surge in the LNG shipping market in the third quarter of 2022, driven by strengthening winter season demand towards year-end in Asia and Europe, high European demand due to the prolonged Russia-Ukraine war, and tight vessel availability,” the company said.
In the near term, MISC said prospects remain positive backed by growing global demand for LNG amidst the ongoing European energy crisis and additional LNG infrastructure investment, which would further support LNG growth despite tonne-mile demand coming under some pressure from trade pattern shifts to shorter distances.
Captain Rajalingam Subramaniam, MISC’s chief executive, said: “MISC continues to demonstrate resilience and delivered a healthy third quarter financial performance amidst the ongoing volatility of the industry.
“Our robust financial standing places us on the progressive path to deliver sustainable value to our stakeholders.
“At the same time, we will be steering our mid to long-term ambitions to pursue new business opportunities as we advance to the net-zero future with greater synergy and collaboration with our stakeholders and partners,” he added.
