KUALA LUMPUR: MISC Group Bhd posted a net profit of RM1.83bil in the financial year ended Dec 31, 2021, compared to a net loss of RM43mil in the previous year.

       The group announced in a statement it had returned to the black after its 2020 performance was weighed down by provisions for litigation claims, write-offs and losses following the outcome of the arbitration proceedings by Gumusut-Kakap Semi-Floating Production System (L) Ltd against Sabah Shell Petroleum Company Ltd.

       Revenue in 2021 was RM10.67bil, 13.51% higher than in the year before, mainly on the recognition of revenue from the conversion of an FPSO in the offshore business segment.

       MISC said the higher revenue was also attributed to the deliveries of five VLECs since the fourth quarter of 2020 in the gas assets and solutions segment.

       In the final quarter of 2021 alone, the group posted a net profit of RM461.7mil on revenue of RM3.09bil compared with net profit of RM556mil and revenue of RM2.64bil in the fourth quarter of 2020.

       MISC's board of directors declared an interim dividend of 12 sen per share with entitlement date on March 4, 2022, and payable on March 16, 2022.

       “Our fourth quarter and full financial year results for 2021 demonstrate our continued resilience as we sustain the upward momentum to end the year with measured confidence.

       "Over the years, we have been consistently integrating the environmental, social and governance principles into our business, in line with our future-focused approach in driving long-term sustainable value for our stakeholders," said MISC president and group CEO Datuk Yee Yang Chien in a statement.

       Moving forward, he said that while spot rates have eased, the medium-term outlook for LNG shipping remains favourable as reflected by the record number of new LNG carriers ordered in 2021.

       Notwithstanding, the operating income of the gas assets and solutions segment continues to remain stable, supported by its existing portfolio of long-term charters, he added.

       In the petroleum shipping market, low freight rates continue to pose a challenge despite some modest improvement in the fourth quarter of 2021.

       Yee noted that despite the oil recovery and easing of Opec+ production cuts in 2021, seaborne trading volumes have remained below pre-pandemic levels while the tanker fleet has continued to grow, albeit slowly.

       In addition, the short-term outlook is could by the rapid spread of the Omicron virus variant.

       "However, the tanker market fundamentals are expected to improve further in 2022, especially towards the second half.

       "Given the uncertain landscape, the Petroleum Shipping segment will continue to focus on building long-term secured income through its niche shuttle tanker business and rejuvenation of its fleet with eco-friendly tankers," said Yee.

       For its offshore business, MISC continues to focus on the execution of the FPSO project in hand while sourcing for opportunities in targeted markets.

       In the meantime, Yee said the segment’s existing portfolio of long-term contracts will underwrite its financial performance.

       Meanwhile, the marine and heavy engineering segment remains vigilant on the prospects of its heavy engineering sub-segment.

       With high LNG demand, the expected increase in LNG trade would lead to dry docking deferrals resulting in stiffer competition amongst shipyards for limited dry docking opportunities.

       "Considering various border restrictions worldwide, foreign clients will continue to send their vessels to other countries with less restrictions, hence the Marine sub-segment is expected to remain challenging.

       "Given this environment, the segment will remain focused on replenishing its order book, as well as prioritising cost management efforts, safe execution and timely delivery of ongoing projects," said Yee.