MISC Annual Report 2019

Group Financial Review The Group’s income statements for the year ended 31 December 2019 can be found on page 241 of this Annual Report. Segmental Performance – FY2019 LNG LNG revenue of RM2,582.1 million was 10.0% higher than the corresponding year’s revenue of RM2,346.3 million, mainly from higher number of operating vessels in the current year following acquisition of two LNG carriers, whereby one carrier was acquired in December 2018 and the other carrier was acquired in January 2019, and redeployment of vessels previously on charter suspension. LNG operating profit of RM1,190.4 million was RM205.8 million or 20.9% higher than the corresponding year’s profit of RM984.6 million, mainly from higher revenue as explained above coupled with additional charter rate for Floating Storage Units (FSU). Petroleum Petroleum revenue of RM4,304.8 million was 0.2% lower than the corresponding year’s revenue of RM4,312.8 million, mainly due to lower number of vessels. However, the reduction in revenue is cushioned by higher freight rates secured in the current year. Petroleum segment recorded an operating profit of RM360.4 million compared to the corresponding year’s loss of RM12.3 million, mainly from higher margin on freight rates in the current year. Operating Profit Group operating profit of RM1,929.3 million was 31.6% higher than FY2018 operating profit of RM1,466.4 million mainly driven by higher margin on freight rates achieved in Petroleum segment and higher revenue in the LNG segment, combined with lower losses in the Heavy Engineering segment from its conversion works and lower unabsorbed overheads. Profit Before Tax Group profit before tax of RM1,512.3 million was 12.5% higher than FY2018’s profit before tax of RM1,344.1 million largely from higher operating profit recorded in the current financial year but was partially offset by higher impairment recorded in the current financial year. Earnings Per Share (Sen) Profit attributable to the equity holders of the Corporation amounting to RM1,426.4 million translates to earnings per share of 32.0 sen in FY2019 as opposed to 29.4 sen in FY2018. Dividends In respect of FY2019, the Board had approved and declared on quarterly basis a total tax exempt dividend of 30.0 sen per share. In addition to the quarterly dividends, a special dividend of 3.0 sen per share was also approved and declared by the Board, making a total approved and declared tax exempt dividend of 33.0 sen per share or RM1,473.0 million in respect of FY2019. This was higher than the dividend declared and paid in respect of FY2018 of 30.0 sen per share or RM1,339.1 million. The special dividend was approved and declared by the Board due to surplus cash in excess of the foreseeable requirements of the Group. Offshore Revenue of RM1,086.2 million was 9.2% lower than the corresponding year’s revenue of RM1,196.0 million as the corresponding year included construction revenue of Floating, Storage and Offloading (FSO) Benchamas 2 which was completed in May 2018 and one-time reimbursement cost on towing and installation of a project. However, the reduction in revenue is partially negated by the one-time reimbursement cost on upgrading works for an FPSO recorded in the current year. Offshore operating profit of RM495.4 million was RM66.4 million or 11.8% lower than the corresponding year’s profits of RM561.8 million, mainly due to lower revenue as explained above coupled with recognition of demobilisation costs in the current year. Heavy Engineering Heavy Engineering revenue of RM1,009.8 million was 3.6% higher than the corresponding year’s revenue of RM974.3 million, mainly due to higher revenue from dry docking services on LNG carriers and conversion works. Heavy Engineering segment recorded a lower operating loss of RM40.5 million compared to corresponding year’s loss of RM124.6 million, mainly due to higher revenue as explained above coupled with lower unabsorbed overheads in the Marine sub-segment. 984.6 1,190.4 LNG (RM million) (12.3) 360.4 PETROLEUM (RM million) PETROLEUM (RM million) 4,312.8 LNG (RM million) Revenue Operating Profit FY2019 FY2018 561.8 495.4 OFFSHORE (RM million) OFFSHORE (RM million) 1,196.0 HEAVY ENGINEERING (RM million) 974.3 (124.6) HEAVY ENGINEERING (RM million) Revenue Operating Profit 2,346.3 4,304.8 FY2019 FY2018 1,086.2 1,009.8 (40.5) FY2019 FY2018 FY2019 FY2018 2,582.1 81 80 OUR FINANCIAL PERFORMANCE MISC BERHAD PEOPLE. PASSION. POSSIBILITIES ANNUAL REPORT 2019