MISC Annual Report 2018

GROUP FINANCIAL REVIEW REVENUE For the financial year ended 31 December 2018 (FY2018), Group revenue of RM8,780.3 million was 12.8% lower than the financial year ended 31 December 2017 (FY2017)’s revenue of RM10,068.2 million. Suspension of charter contracts due to geopolitical situation, lower construction revenue as the Floating, Storage and Offloading (FSO) Vessel Benchamas 2 completed in the current year and the recognition of one time gain for Gumusut-Kakap Semi-Floating Production System (L) Limited (GKL) variation works arising from the favourable adjudication decisions in the corresponding year were the main factors for the decrease in the Group’s revenue. OPERATING PROFIT Group operating profit of RM1,466.4 million was 46.4% lower than FY2017’s operating profit of RM2,733.6 million. The decrease was mainly due to lower revenue in current year combined with the recognition of compensation for early termination of a time charter contract and reversal of provision following early termination of in-chartered contracts in the corresponding year. PROFIT BEFORE TAX Group profit before tax of RM1,344.1 million was 32.9% lower than FY2017’s profit before tax of RM2,003.6 million. This contraction was largely due to the compressed operating profit in the current year. EARNINGS PER SHARE (SEN) Profit attributable to the equity holders of the Corporation amounting to RM1,311.5 million translates to earnings per share of 29.4 sen in FY2018 as opposed to 44.4 sen in FY2017. DIVIDENDS In respect of FY2018, the Board had approved and declared on quarterly basis a total tax exempt dividend of 30.0 sen per share amounting to RM1,339.1 million. The aggregated tax exempt dividend of 30.0 sen per share or RM1,339.1 million for FY2018 was consistent with the dividend declared and paid in respect of FY2017. TOTAL ASSETS Group total assets as at 31 December 2018 of RM52,065.3 million were 3.2% higher than RM50,469.8 million as at 31 December 2017. The increase in the Group’s total assets was mainly due to the increase in finance lease receivables following acquisition of FSO Mekar Bergading and a LNG vessel during the year. TOTAL LIABILITIES Group total liabilities of RM15,701.2 million as at 31 December 2018 was 7.8% higher than RM14,565.0 million as at 31 December 2017 mainly due to increase in interest-bearing loans and borrowings. SHAREHOLDERS’ EQUITY Shareholders’ equity of RM35,351.1 million as at 31 December 2018 was 1.5% higher than RM34,844.2 million as at 31 December 2017. The increase in shareholders’ equity was mainly due to currency translation gain of RM682.9 million. NET DEBT / EQUITY RATIO The Group’s net debt-to-equity ratio of 0.20 as at 31 December 2018 was higher compared to 0.16 as at 31 December 2017 following the increase in total interest-bearing loans and borrowings during the year under review. CAPITAL EXPENDITURE REQUIREMENTS Group committed capital expenditure as at the end of FY2018 stood at RM3,732.2 million. Based on our strong cash position as at the end of FY2018 and existing funding facilities, the Group should be able to fund committed capital expenditure and planned growth plans. Financial Period Results Tax Exempt Dividends 1 January 2018 to 31 December 2018 Announcement of results & dividends 14 May 2018 Announcement of first quarter financial results 7 August 2018 Announcement of second quarter financial results 19 November 2018 Announcement of third quarter financial results 22 February 2019 Announcement of fourth quarter financial results 14 May 2018 Announcement of first dividend 7 August 2018 Announcement of second dividend 19 November 2018 Announcement of third dividend 22 February 2019 Announcement of fourth dividend 12 June 2018 First dividend paid 14 September 2018 Second dividend paid 18 December 2018 Third dividend paid 26 March 2019 Fourth dividend paid FINANCIAL CALENDAR Total Assets Increased Shareholders’ Equity Increased HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 69 MISC BERHAD ANNUAL REPORT 2018 68