02 May 2012
MISC retrenched 1,400 employees as it exits liner business to focus on energy-based maritime and transportation
(MISC opening stock price today (2.5.2012) was RM 4.80)
Malaysian International Shipping Corporation Bhd (MISC) is retrenching some 1,400 employees worldwide this year following its exit from the liner business.
The first phase of the retrenchment was carried out on March 31 while the second phase will be implemented on June 30.
MISC group corporate affairs general manager Fiona Clare Pereira said the shipping conglomerate extended a reasonable severance package to affected staff.
"In addition, we also provided additional support to assist the affected employees in managing the change in their careers," she said in a recent email response.
Pereira added that efforts were ongoing to place staff who had sought redeployment within the group, while some of the sea-going staff would be re-skilled for employment in its other shipping divisions.
MISC, the listed shipping arm of Petroliam Nasional Bhd (Petronas), had announced its exit from the liner business last November in view of the expected larger investment necessary to stay relevant in the industry.
It said its decision was made after the rapid evolvement of the industry, coupled with overcapacity and container rates trending below operating costs, threatened the company's liner business restructuring plans.
For the three months to Dec 31, 2011, MISC posted a net loss of RM1.74 billion against a net profit of RM1.38 billion a year earlier. This dragged MISC's results for the nine-month period to a loss of RM1.48 billion against a net profit of RM2.18 billion in the previous corresponding period.
Pereira said as a shipping conglomerate, investment prioritisation and opportunity cost consideration were necessary in the allocation of resources to support the growth of each business sector.
"Our focus in recent years has been on providing maritime and transportation solutions for the energy sector, and hence, the bulk of our resources are dedicated towards growing our energy-based business segments," she said.
She added that MISC had established leading market presence in some of the tanker market segments, which the company would continue to build and develop for the future.
"Notwithstanding the present depressed freight environment, we see growth prospects for both the petroleum/chemical tanker and LNG tanker markets over the longer term," she said.