GROUP FINANCIAL REVIEW REVENUE OPERATING PROFIT AND PROFIT BEFORE TAX For the financial year ended 31 December 2022 (FY2022), Group revenue of RM13,867.0 million, was 29.9% higher than the financial year ended 31 December 2021 (FY2021) revenue of RM10,671.7 million, contributed by increased freight rates in the Petroleum & Product Shipping segment, higher recognition of revenue from the conversion of an FPSO in the Offshore Business segment following improved project progress, as well as higher earning days in the Gas Assets & Solutions segment. In addition, the Marine & Heavy Engineering segment also contributed to the increase in revenue from higher progress for an on-going project and greater dry-docking activities. Group operating profit of RM3,102.0 million was 59.2% higher than FY2021 operating profit of RM1,948.3 million, mainly due to higher revenue posted by the Petroleum & Product Shipping and Gas Assets & Solutions segments. In addition, the Marine & Heavy Engineering segment turned profitable during the year in tandem with higher revenue, coupled with recovery of COVID-19 claims and reversal of cost provisions for both on-going and post sail-away projects. Consequently, the Group’s profit before tax increased to RM1,874.3 million in FY2022, which was higher by 5.6% or RM99.7 million as compared to the previous year’s profit of RM1,774.6 million, despite recording higher impairment provisions, higher finance costs as well as share of loss from joint ventures in FY2022. EARNINGS PER SHARE (SEN) TOTAL LIABILITIES EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE CORPORATION Profit attributable to the equity holders of the Corporation amounting to RM1,822.9 million translates to earnings per share of 40.8 sen in FY2022, which is comparable to earnings per share of 41.0 sen in FY2021. DIVIDENDS In respect of FY2022, the Board had approved and declared on quarterly basis a total tax exempt dividend of 33.0 sen per share or RM1,473.0 million, which was consistent to the total dividend declared and paid in respect of FY2021. The dividends were declared in line with the Group’s commitment to provide investors and shareholders with consistent dividend payments. TOTAL ASSETS Group total assets as at 31 December 2022 of RM62,664.2 million was 8.9% higher than the Group total assets as at 31 December 2021 of RM57,521.5 million. The increase in the Group’s total assets were mainly due to higher recognition of contract assets relating to conversion of an FPSO and capital expenditure (CAPEX) incurred for ships during the year. • Group total liabilities of RM24,360.2 million • 7.8% higher than FY2021 The Group’s gross debt-to-equity ratio stood at 0.47 • Group revenue of RM13,867.0 million • 29.9% higher than FY2021 A total tax exempt dividend of 33.0 sen per share Earnings per share of 40.8 sen • Group operating profit of RM3,102.0 million • 59.2% higher than FY2021 • Group total assets of RM62,664.2 million • 8.9% higher than FY2021 Group total liabilities as at 31 December 2022 of RM24,360.2 million was 7.8% higher than higher than the Group total liabilities as at 31 December 2021 of RM22,596.5 million, mainly due to accruals relating to the conversion of an FPSO from higher project progress in the current year. Despite paying a total dividend of RM1,473.0 million in FY2022, the equity attributable to equity holders of the Corporation as at 31 December 2022 of RM37,458.7 million was 9.6% higher than the equity attributable to equity holders of the Corporation as at 31 December 2021 of RM34,162.7 million, mainly due to net profit recognised for FY2022, favourable movement in hedging reserve and gain on currency translation as Malaysia Ringgit (RM) weakened against the United States Dollar (USD) during the year. The Group recorded cash flows generated from operating activities of RM3,042.1 million which was higher by 4.6% compared to cash flows generated from operating activities of RM2,908.6 million in the previous year, despite the higher payments for cost relating to the conversion of an FPSO amounting to RM2,679.9 million in FY2022 compared to payments of RM1,126.1 million in FY2021. Excluding the payments for the above FPSO conversion, the Group generated an operating cash flow of RM5,722.0 million for FY2022, which was higher by 41.8% compared to operating cash flow of RM4,034.7 million in FY2021, mainly contributed by the higher collection received from customers in the current year. As a result, the Group’s cash balance remains healthy at RM7,134.0 million. The Group’s gross debt-to-equity ratio as at 31 December 2022 of 0.47 was lower compared to the Group’s gross debt-to-equity ratio as at 31 December 2021 of 0.49, despite an increase in interest-bearing loans and borrowings during the year, mainly due to the increase in total equity as explained above. Meanwhile, the Group’s net debt-to-equity ratio of 0.28 as at 31 December 2022 remains as one of the lowest in the industry, although it is slightly higher compared to net debt-toequity ratio of 0.26 as at 31 December 2021. The Group’s approved and contracted committed capital expenditure as at the end of FY2022 stood at RM4,403.8 million. This excluded the amount committed for the conversion of an FPSO amounting to RM2,282.4 million as at 31 December 2022 as explained in Note 33 of the Financial Statements. Based on our strong cash position as at the end of FY2022 and existing funding facilities, the Group should be able to fund the committed capital expenditure and pursue growth prospects. CASH FLOW GEARING RATIO CAPITAL EXPENDITURE REQUIREMENTS • Equity attributable to equity holders of the Corporation of RM37,458.7 • 9.6% higher than FY2021 • Cash flows generated from operating activities of RM3,042.1 million • 4.6% higher than FY2021 The Group’s approved and contracted committed capital expenditure stood at RM4,403.8 million • Group’s profit before tax increased to RM1,874.3 million • 5.6% higher than FY2021 Financial Review Financial Review 99 98 MISC Berhad Integrated Annual Report 2022
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