MISC to quit container shipping business


Thursday, 24 November 2011 01:47

MISC to quit container shipping business The Malaysian carrier will pull out of the container shipping business by June 30, 2012, reported Dow Jones Newswires.


MISC will incur a one-time cost of US$400 million due to the move, resulting in a loss for the financial year ending December 2011, but will be positive for earnings over the longer term, the company said in stock exchange filings.


The company reported separately a 62 percent drop in net profit for the July-September period at $44.22 million compared with $115.85 million during the same three months a year earlier. Revenue slipped 15.2 percent to $821.7 million from $969.11million.


It blamed depressed aframax freight rates, lower liftings and high bunker costs for the weak results in the quarter. MISC has recently changed its financial year from end-March end to end-December.


"The exit process will involve the withdrawal from various trade alliances and termination of related service and operational contracts," MISC said, adding that the process includes disposal of its related assets.


MISC said the industry is plagued by over-capacity and operators struggle for profitability in the depressed freight-rate environment. This threatens MISC's restructuring to focus on Asia.


This was hastened after the liner business suffered $789 million of losses over the past three financial years, it added.



Source: CargonewsAsia.