[170812.EN.SEA] Containership Exit Has Helped Malaysia's MISC To Move Towards Recovery

MALAYSIAN carrier MISC Berhad is clawing its way out from US$1.04 billion losses accumulated over a five-year period but its shipping business remains under pressure from depressed charter rates and steep bunker costs, say industry analysts.

The Kuala Lumpur-based carrier's decision to exit from the container sector to focus on its bulk and energy operations stemmed its losses with a writeback possible of US$174 million from a pending sale of 10 containerships, said investment firm OSK Research, reported the Malaysia Star.

Although the troubled carrier is likely to continue seeing losses into third quarter, it has improved from the first.

MISC's move to exit the liner business has seen sale of container vessels amount to $200 million but it was not enough to increase its share value which has plummeted.

Its liquefied natural gas (LNG) business has kept the company going, but this sector has had a false upturn due to US-sanctions on Iranian oil imports driving up shipments.

But MISC's strong relationship with Malaysian Petronas Gas Bhd has seen it commissioning two floating storage units for it's re-gasification terminal in Malacca. This will show dividends for a 20-year period, with further business likely in as many as nine LNG vessels.

It's has also acquired Canadian shale gas firm Progress Energy which may see a strong return with production cheaper than conventional gas. "This would stimulate shipping activities and lengthen the voyage time for cheaper LNG, which will in turn be favourable for MISC in terms of higher shipping rates," said OSK Research.

Source : SN-TR.