MISC shares up after clinching Petrobras contract

KUALA LUMPUR (Feb 6): MISC Bhd shares rose by 3.89% following news of its US$525.6 million (RM2.16 billion) contract win from Brazil’s Petróleo Brasileiro S.A. (Petrobras).

In a filing with Bursa Malaysia yesterday, MISC said its wholly-owned subsidiary AET Tanker Holdings Sdn Bhd had clinched a long-term charter contract for three newbuilding Suezmax DP2 shuttle tankers for operations in Brazilian and international waters.

AET is the petroleum shipping unit of MISC, specialising in the global ocean transport of petroleum.

At 11.01am, MISC share price increased 31 sen to RM8.27 with 954,900 shares traded.

Meanwhile, RHB Investment Bank Bhd has kept its ‘buy’ rating for MISC with a target price (TP) of RM9.21, premised on better tanker rates in 2020, strengthening operating cash flow and continuous contract flows from major segments.

“We are positive on the contract win, as it helps to generate recurring income for MISC while strengthening its business relationship with Petrobras.

“Downside risks to our call are lower-than-expected charter rates and higher-than-expected vessel operating costs,” it said in a research note today.

Another research firm, Affin Hwang Investment Bank Bhd said the new shuttle tankers will be in addition to the six vessels currently chartered to Petrobras, four of which are currently under construction.

“We maintain our 'hold’ rating and unchanged sum-of-the-parts (SOTP)-based TP at RM8.40,”  it said.