MISC BERHAD 108 INTEGRATED ANNUAL REPORT 2023 109 www.miscgroup.com FINANCIAL REVIEW SECTION 9 Group Financial Review Operating profit and profit before taxation Group operating profit of RM2,881.4 million was 7.1% lower than FY2022 operating profit of RM3,102.0 million, mainly due to operating loss recorded in the Marine & Heavy Engineering segment primarily attributed to the additional cost provisions arising from revised schedule on ongoing projects during the year. However, both Petroleum & Product Shipping and Gas Assets & Solutions segments recorded higher operating profit from higher revenue. The Group reported a higher pro t before taxation of RM2,093.7 million in FY2023, an increase of 11.7% from RM1,874.3 million recorded in FY2022 mainly due to higher share of profit from joint ventures and lower impairment charges compared to the previous year. Revenue Group revenue for the financial year ended 31 December 2023 (FY2023) of RM14,271.7 million was 2.9% higher than the financial year ended 31 December 2022 (FY2022) revenue of RM13,867.0 million, mainly contributed by higher revenue from new and ongoing projects in the Marine & Heavy Engineering segment coupled with improved freight rates in the Petroleum & Product Shipping and Gas Assets & Solutions segments. However, the increase in Group’s revenue was offset by lower revenue recognition from the conversion of an FPSO following lower project progress during the year. Financial Review Earnings per share (sen) Profit attributable to the equity holders of the Corporation amounting to RM2,123.5 million translates to earnings per share of 47.6 sen in FY2023 as opposed to 40.8 sen in FY2022. Dividends In FY2023, the Board had approved and declared on quarterly basis a total tax exempt dividend of 36.0 sen per share or RM1,606.9 million, which was higher than the total dividend declared and paid in respect of FY2022 of 33.0 sen per share or RM1,473.0 million. Group Financial Review Cash flows from operating activities The Group recorded cash flows from operating activities of RM5,696.3 million which was higher by 87.2% compared to cash flows from operating activities of RM3,042.1 million in the corresponding year. This was contributed by the charter hire prepayments for two FSUs in the Gas Assets & Solutions segment as well as higher charter rates from the Petroleum & Product Shipping segment. Additionally, the Group recorded lower payments for cost relating to MERO 3 Project during the year. Excluding the charter hire prepayments received for two FSUs and payments for costs relating to MERO 3 Project, the Group’s adjusted cash flows from operating activities of RM6,536.1 million was higher by RM814.1 million or 14.2% compared to RM5,722.0 million in FY2022. As a result, the Group’s cash balance remains healthy at RM7,731.6 million. Gearing Ratio The Group’s gross debt-to-equity ratio as at 31 December 2023 of 0.44 was lower compared to the Group’s gross debt-to-equity ratio as at 31 December 2022 of 0.47 following the decrease in total interest-bearing loans and borrowings during the year. The Group’s net debt-to-equity ratio of 0.25 as at 31 December 2023 was also lower compared to net debt-to-equity ratio of 0.28 as at 31 December 2022. CAPEX requirements The Group’s approved and contracted committed CAPEX as at the end of FY2023 stood at RM2,732.3 million. This excluded the amount committed for the conversion of an FPSO amounting to RM1,112.9 million as at 31 December 2023 as explained in Note 32 of the Financial Statements. Based on our strong cash position as at the end of FY2023 and existing funding facilities, the Group should be able to fund the committed CAPEX and pursue targeted strategic investments. Equity attributable to equity holders of the Corporation Despite paying a higher total dividend of RM1,606.9 million in FY2023, the equity attributable to equity holders of the Corporation as at 31 December 2023 of RM39,285.8 million was 4.9% higher than the equity attributable to equity holders of the Corporation as at 31 December 2022 of RM37,458.7 million, mainly due to net profit recognised for FY2023 and gain on currency translation as the United States Dollar (USD) appreciated against the Malaysian Ringgit (RM) during the year. Segmental Performance Gas Assets & Solutions Gas Assets & Solutions segment’s revenue of RM3,263.9 million was RM150.5 million or 4.8% higher than the previous year’s revenue of RM3,113.4 million, mainly from higher charter rates in the current year. The segment’s operating profit of RM1,572.1 million was RM35.5 million or 2.3% higher than the previous year’s profit of RM1,536.6 million, mainly from higher revenue as explained above. Revenue (RM million) 2023 2022 Operating Profit (RM million) 2023 2022 1,572.1 3,263.9 3,113.4 1,536.6 Total assets Group total assets as at 31 December 2023 of RM65,060.1 million was 3.8% higher than the Group total assets as at 31 December 2022 of RM62,664.2 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 CAPEX incurred for ships during the year. Total liabilities Group total liabilities as at 31 December 2023 of RM25,094.3 million was 3.0% higher than the Group total liabilities as at 31 December 2022 of RM24,360.2 million, mainly due to accruals relating to the additional cost provision for ongoing projects under Marine & Heavy Engineering segment.
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