Malaysia’s LNG shipper MISC, a unit of Petronas, said its LNG business logged a drop in operating profit in the January-March period of this year.
The shipping firm said its gas assets and solution business, which includes a fleet of LNG and ethane carriers, posted first-quarter revenue of 775.3 million ringgit ($165 million), a rise of 2.6 percent compared to the same period last year.
This was primarily driven by the translational impact from weakening of Malaysian ringgit against the US dollar in the current quarter, MISC said.
Operationally, the segment’s revenue in the current quarter was lower due to lower earning days from contract expiries and vessel disposals, it said.
Moreover, MISC’s gas assets and solution business reported an operating profit of 361.1 million ringgit ($76.7 million) in the first quarter.
Operating profit decreased by 6.2 percent compared to the same period last year mainly due to higher vessel operating costs.
MISC is one of the largest operators of LNG carriers and most of them are on long-term charters.
According to MISC’s website, it operates a fleet of 30 LNG carriers, including 3 as part of joint ventures, and it also has one chartered LNG bunkering vessel.
Besides operational vessels, there are 14 LNG carriers on order, the data shows.
Overall results up
Looking at the overall quarterly results, MISC’s operating profit of 882 million ringgit ($187.5 million) in the first quarter rose by 6.8 percent year-on-year.
MISC attributed this due to higher profit in the petroleum and product shipping segment in tandem with a higher revenue.
Group revenue of 3.63 billion ringgit rose by 18.2 percent mainly due to higher revenue from ongoing projects in the marine and heavy engineering segment and higher earning days achieved in the petroleum and product shipping segment, MISC said.
MISC expects LNG earnings to remain “stable”
Spot LNG rates rates softened in the first quarter 2024 due to seasonally weak demand and inventory buildup in Europe and Northeast Asia market, according to MISC.
In the current year, the prospects for the LNG shipping market remain “positive” as spot rates are anticipated to gradually improve in line with seasonal demand.
MISC said the operating income for the gas assets and solutions segment is anticipated to remain “stable”, supported by its portfolio of long-term charters.