MISC in spending spree /28 May 2001/

The order was announced by MISC managing director, Datuk Mohd Ali Yasin, when a revealing a 21.4% leap in pre-tax profits to M$1.43bn (US$376m) for the year ending March 31, 2001.

No yard was named to build the four 7,200 teu ships, which are to be delivered in 2003 and 2004. The newbuildings are in line with similar orders by MISC's Grand Alliance partners Overseas Orient Container Line and Hapag Lloyd.

Mr Mohd Ali said that MISC wanted to increase its capacity in the Grand Alliance and intended to maintain its 4.8% share of slot capacity. The company currently has 27 containerships with the largest size of 4,500 teu capacity.

MISC's turnover was up 9% to M$5.85bn compared with M$5.35bn for the corresponding 12 months ending March 31, 1999. "The increase was due to a number of factors, including the increased freight rates and the divestment of some of our non-core activities," Mr Mohd Ali said. Non-core activities included IT, property development, and travel and ferry services.

Liquefied natural gas shipping continues as MISC's core revenue and profit driver. The world's largest owner of LNG carriers, LNG shipping accounted for 80% of the company's profit and 40% of revenue. The company has five LNG-carriers on order at an estimated cost of US$860m. MISC has until next month to declare a sixth option at Japan's Mitsui yard. "But we don't have to wait for June," Mr Mohl Ali said. That would bring the fleet to 19 LNG carriers by 2005.

"Although shipping is among the first to be affected by the global economic slowdown, we are still positive because of the continued strong growth demand for LNG for the next 10-15 years at least," he said.

The group says this year it plans to expand into new markets for LNG in India, the US, Iran, China and Norway.

Source: Lloyd's List 7 days, 26th May 2001, Marcus Hand.