MISC Bhd’s shares rose following news that its wholly-owned unit, AET Tanker Holdings Sdn Bhd (AET), has secured long-term charter contracts from Chartering and Shipping Services SA, a wholly-owned subsidiary of Total SA.
Under the contracts, AET’s vessel-owning entity, AET Inc Ltd will own and operate two newly-built Liquefied Natural Gas Dual Fuel Very Large Crude Carriers (VLCCs), and the charters are expected to commence in 2022.
AET specialises in global ocean transport of petroleum, while Total SA is a French multinational integrated oil and gas (O&G) company.
In a note, Kenanga Research said it was positive on the contract win, especially during these challenging times in the O&G sector.
“Overall, the long-term contract win is in line with the company’s strategy to increase its earnings and cash flow visibility by reducing its exposure within the spot market.
“While the contract value and tenure were undisclosed, based on our assumptions, we guesstimate the contracts should contribute RM44 mil per year in earnings upon commencement in 2022, based on an assumption of US$35,000 per day charter rates, RM4.30 per US dollar exchange rate and 40% margins,” the research house said.
It added that the contract tenure is expected to be for five to 10 years.
At 10.50am, shares of MISC rose one sen to RM7.59 with 748,100 shares traded. — April 8, 2020, Bernama
