MALAYSIAN energy shipping company MISC saw 2024 profits plunge by almost half to MYR1.2bn ($270.9m) on weak market conditions and higher impairment provisions.

Group revenue fell 7.2% to MYR13.2bn as the market softened in the fourth quarter especially.

The lower number of earning days and charter rates for MISC’s mainstay liquefied natural gas carriers was exacerbated by higher operating costs, impacting its gas assets and solutions segment.

MISC said LNG carrier spot rates continued sliding in the fourth quarter mainly due to high vessel availability as a steady stream of newbuildings came into service.

The declining rates are a double blow for the group as they affected the long-term valuation of its assets to the extent that provisions had to be made.

MISC saw no reprieve for rates throughout the rest of the year due to the continued influx of new vessels and delays in additional supply from new LNG liquefaction projects, and did not expect to see any recovery until post-2026 as LNG supply gradually increases when the delayed projects become operational.

Among strategic opportunities MISC is exploring for its spot vessels is repurposing the vessels into floating storage solutions.

Conditions were not much better in the tanker market and MISC said that while there was a sequential in the fourth quarter performance, crude tanker spot rates remained subdued compared to the first half of 2024 due to softer oil demand, particularly from China, and ongoing Opec+ output curbs.

MISC was more upbeat on the 2025 outlook for the segment however, as high tonne-mile demand from continued vessel rerouting and long-haul Atlantic-Asia trade, as well as minimal fleet expansion is seen supporting the market.

Meanwhile, MISC sees steady oil prices and sustained global demand continuing to encourage investments in offshore projects, which is positive for its offshore segment comprising mainly of floating production storage and offloading vessels.

FPSO demand remains strong in South America, West Africa and the Asia-Pacific, and MISC said it will remain focused on pursuing new opportunities and expanding its presence in the market.

“This quarter has been one of both progress and challenges for MISC,” said chief executive Zahid Osman.

“Our performance was marked by commendable achievements, unexpected market downturns, and project delivery challenges.”

MISC meanwhile continues to build up its core business segments by securing contracts for newbuilding LNG carriers, increasing its involvement in the FPSO business and developing strategic partnerships to pursue new energy opportunities in the ammonia value chain.