MISC Berhad's first-half results for FY24 aligned with analyst and consensus expectations, with core profits meeting 55% and 52% of forecasted figures, respectively. Despite a robust performance in the petroleum division, challenges in the gas & asset solutions sector persist, exacerbated by delays in the FPSO Mero 3's hook-up process. This setback could push the anticipated first oil date to late 3QFY24 or early 4QFY24, affecting earnings projections.

One broking house maintained its MARKET PERFORM call with a target price of RM8.09, noting a balanced risk-reward profile amid these challenges. Another analyst retained a HOLD recommendation with an unchanged target price of RM8.13, highlighting MISC's defensive nature and stable dividend yields as key support factors for the share price.

MISC's core net profit for the first half of FY24 reached RM1.25 billion, marking a 7% year-on-year increase. The company declared a second interim dividend of RM0.04 per share, which aligns with expectations. However, the offshore division, particularly the Mero 3 FPSO project, is experiencing delays due to technical issues with riser connections. This has led to potential delays in achieving the final acceptance and first oil date, possibly impacting earnings.

The petroleum division remains strong, benefiting from increased tanker rates and vessel earnings. Conversely, the gas & asset solutions division faces difficulties with weak LNG shipping spot markets and reduced charter rates due to contract expirations. Revenue grew by 5% year-on-year, although a 9% quarter-on-quarter decline in 2QFY24 reflects broader sectoral challenges.

While MISC Berhad's financial performance meets expectations, the delays in the Mero 3 FPSO project and ongoing market conditions present risks. Analysts continue to project a cautious but stable outlook for the company, with target prices reflecting current challenges and opportunities.