Malaysia International Shipping Corp said on Monday its fourth-quarter profits nearly doubled, and expects another strong performance in the current financial year due to firm freight rates.
Shipping lines have seen freight rates surge on rising global trade, particularly to and from China, and a scarcity of vessels.
The world's largest carrier of liquefied natural gas and Malaysia's fourth-biggest listed firm said its net profit for the three months to end-March rose 82 percent to 727.75 million ringgit ($191.5 million) from 399.86 million for the same period in 2003.
A survey of 17 analysts compiled by Reuters Estimates had forecast a fourth-quarter profit of 590 million ringgit.
Earnings from American Eagle Tankers, bought last July from Singapore's Neptune Orient Lines Ltd, also boosted profits, MISC said.
It said in a statement prospects of the shipping industry for the current year remained positive.
"MISC's existing long term charters and contracts of affreightment in the LNG and petroleum businesses will also continue to provide the group with strong and stable earnings," it said. MISC and American Eagle have 46 crude tankers including three very large crude carriers (VLCCs), with MISC having ordered another six LNG tankers and six VLCCs for delivery by 2007.
MISC, 62 percent-owned by state-controlled oil and gas firm Petronas, has also profited from increased energy demand as it operates the world's largest LNG fleet - 17 tankers with a combined capacity of 1.9 million cubic metres.
Lower LNG prices are spurring demand from main users, such as power plants, as the cleaner LNG narrows its price gap with cheaper coal, which accounts for 88 percent of fossil energy resources in Asia.
Petronas owns a 23 million tonne-per-year LNG facility in Malaysia's Bintulu, the world's biggest single-site production stream. Malaysia is the world's third-largest LNG exporter.
MISC caters for most of Petronas's shipping needs.
For the full year ended March 31, MISC, which get about 80 percent of its earnings from its LNG business, posted a 75 percent rise in net profit from a year earlier to 2.29 billion ringgit, topping analysts' forecast of 2.15 billion.
Analysts say earnings growth is likely to slow in the current financial year due to an expected fall in freight rates next year as new ships enter a competitive market.
They expect profit for the 2005 fiscal year to rise just six percent from the previous year to 2.43 billion ringgit as the prospect of more ships entering the market and a slowing in China's economic growth may see rates peak this year.
Comments
Comments are closed.