MISC Berhad (MISC) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to MISC's Fourth Quarter Financial Year 2019 Analyst Briefing Conference call. Rozainah from MISC Investor Relations team will run through the agenda for today's briefing. Rozainah, over to you.

Thank you, Akarin. A very good evening, ladies and gentlemen. Thank you for participating in our fourth quarter financial year 2019 analyst briefing. We have with us today Mr. Raja Azlan Bin Raja Azwa, VP Finance; [ Ms. ] Eslin Halimi, Chief Financial Reporting, Governance and Budget, Finance; Mr. Emran Othman, VP, Corporate Planning; Mr. Vincent Ng, General Manager, Corporate Planning. Before we start the session with the presentation on the quarter's performance, we would like to take this opportunity to provide you some information on the impact of COVID-19 or coronavirus outbreak to MISC's business. This info will be presented by Mr. Vincent Ng. Vincent, over to you.

Thanks, Rozainah. We thought that we should start this briefing with the so-called hot topic of the day. This is on the COVID-19. So I guess, some of you will have questions anyway. So I would give a quick briefing, and then you can keep your questions to us at the end of session. Okay. I think to start this, let's start with the overall exposure of MISC to China. I think that's the right place to look at things in perspective. To give you some information, the number of vessels that we have trading with China is quite minimal. And generally, that is the main backdrop. Also that -- just to report that we do not have any of our staff who have tested positive for the coronavirus. So at the moment, the impact to us is quite limited. But just to give you a bit more detail on that. I start with the operational impacts. So the operational impacts will impact those ships that are going to or coming from China. And a number of safety measures have been put in place, including we have no crew changes in -- or shore leaves in China at the moment. We have suspended that. And shore leaves and crew changes can only happen 14 days after departure from the last port in China. We are not procuring any provisions in China at the moment. We are not signing on any Chinese seafarers for the time being. That's been put on hold. We are disinfecting all the accommodation spaces after departure from the last port in China. There are regular temperature checks on the crew to make sure that they're not infected. And we have also suspended any repairs, maintenance and drydockings in China since the outbreak started. So that's on the operational side. In terms of the commercial, as I mentioned, we do not have that many vessels involved in China trade. Mainly this -- we have a few chemical vessels doing spot trading. The other vessels that are engaged in China trade are all on time charter to non-Chinese charterers, right? So under the time charter, as you know, there are limited commercial risks because our revenues are on a daily rate basis from the charterers. And typically, those laterals are not restricted to trading in China. They are what we consider to be capable for worldwide trading. They can trade anywhere in the world. So generally, we feel that the commercial risk to us is quite limited, right? However, of course, we know that if the outbreak is prolonged or there are -- it gets worse, there are impacts to demand for oil and gas, which indirectly will affect the shipping market. So that, obviously, we have to wait and see to see how severe that turns out to be. In the short term, there could be some other offsetting effects that you may want to consider because there could be some stockpiling of crude oil by some of the parties. Some of the tankers that are currently [ available ] could be used for storage of oil, and this may reduce some of the supply of vessels in the market. There could be some vessels that are delayed from the shipyards in China. As a result, that could have also some impact to manage capacity. So those are slightly offsetting effects to the main impact of reduced demand for oil and gas. So I think I'll summarize that as the main impact for us. If you have any questions, I think we will take them at the end of the session. For the time being, I'll pass you back to Rozainah.

Thank you, Vincent. We will now proceed with the presentation on financial highlights for the quarter's performance, which will be presented by [ Ms. Eslin ], followed by market outlook and business update by Mr. Vincent. At the end of the presentation, we will open the line for a Q&A session. Our event manager will later provide instructions on the Q&A process. Before we start with the presentation, I would like to bring your attention to the disclaimer slide. During the presentation, we may make some forward-looking statements in reference to our plans and expectations, and actual results will differ due to unknown risks, uncertainties and other factors that are, in many cases, beyond MISC's control. With that, I pass the session to [ Ms. ] Eslin for our next agenda to update on MISC's fourth quarter financial year 2019 financial performance. [ Ms. ] Eslin, over to you.

Good evening. Thank you, Rozainah. Thank you to the participants for joining MISC Berhad's Quarter 4 FY 2019 Analyst Briefing. I'll bring your attention to Page 3 of our AB pack. Higher revenue for the quarter, mainly due to higher revenue from Petroleum segment as a result of higher TCE for VLCC and [ Suezmax tankers ]. Higher revenue also contributed by the Offshore segment due to onetime reimbursement cost on upgrading works as well as higher revenue from Heavy Engineering segment, mainly contributed by increase in revenue from Marine segment. Higher PBT from operations during the quarter was due to higher revenue, as mentioned above. For the nonrecurring items during the current quarter, there was an impairment of Petroleum, LNG and Offshore vessels. Whereas in previous quarter, there was an impairment/loss on disposal of 7 A Class vessels, which you may refer to our Bursa announcement. Refer to Page 4 of our AB pack. Lower revenue coming from Petroleum segment mainly due to lower earning days as a result of vessels' redelivery as well as disposal of petroleum vessels since quarter 4 2018. Lower profit from operations recorded during the quarter, mainly due to in previous corresponding quarter, there was a one-off gain due to FSO Ruby II contract extension. Page 5 of our AB pack. Cash flow from operations continuously recorded an equal level comparing between preceding and corresponding quarter, mainly due to the commencement of FSO Mekar Bergading since quarter 3 2018; higher margins from AET; as well as acquisitions of 2 LNG carriers, one each in December 2018 and January 2019. On Page 6, our debt balance is hovering around USD 3 billion throughout the quarter. This is mainly due to the quarterly repayment and drawdown for the project, which is in the pipeline. Now we're moving on to financial performance by business segments. Before I proceed further, I would like to highlight that profit before tax is actually inclusive of the nonrecurring items. On Page 7, for LNG Shipping segment, revenue and profit before tax was quite stable between comparative quarters. Higher revenue and profit before tax since quarter 4 2018 were mainly due to higher number of operating vessels, following acquisition of 2 LNG carriers, one each in December '18 and Jan 2019. At the same time, there was a redeployment of vessels, which was previously on charter suspension. On Page 8 for Petroleum Shipping segment. Lower revenue recorded as compared to corresponding quarter, mainly due to lower earning base as the result of lower number of operating vessels. However, the lower PBT for Petroleum Segment as compared to preceding and corresponding quarters, mainly due to higher blended TCE rates and lower ship operating costs as a result of lower number of vessels, as mentioned above. We move on to Page 9 for Offshore business. Higher revenue reported as compared to preceding and corresponding quarter, mainly due to the onetime reimbursement costs on upgrading work. In addition, profit before tax was lower as compared to preceding quarter, mainly due to impairment of assets and demobilization costs incurred in current quarter, whereas lower profit before tax recorded as compared to corresponding quarter, mainly due to impairment of assets and demobilization costs, as mentioned above. However, this was offset by a one-off gain due to FSO Ruby II contract extension in previous corresponding quarter. And finally, in the last segment on Page 10, formally -- for Heavy Engineering segment. Higher revenue recorded for both preceding and corresponding quarters, mainly due to increased revenue from Marine segment. In addition, Heavy Engineering segment recorded a profit before tax mainly due to improved performance in the Marine segment, as mentioned above. I will now pass to Vincent for market environment and business update.

Thank you, Eslin. As usual, we will start with the LNG Shipping segment. Not surprisingly, the LNG spot rates in the fourth quarter continued to rise after the third quarter rises, and they achieved above $100,000 per day rate. This is mainly due to seasonal factors. At the same time, there were also the question -- or rather the effect of the U.S. sanction on the COSCO-linked vessels and Typhoon Hagibis, which also tightened the availability of vessels. On Page 13. You can see that the picture between the quarters, so quarter 3, quarter 4 hasn't really changed very much. The number of new deliveries in 2019 for the whole year was 38, which was lower than 2018 of 52 units. In 2020, the number of deliveries will about -- will be about the same, 37 vessels, but it will rise in 2021. So I think this reflects the continued growth of liquefaction capacity that's coming on stream over the next few years. Turning to the Petroleum segment. Looking at the charter rates. As you can see also, charter rates are very healthy across all segments, reaching the highest level since 2016, mainly driven primarily by VLCC and also cutting across the Suezmax and Aframax. Some of the main reasons are same as for LNG. It was the winter season, sanctions by the U.S. on the COSCO tankers. And there were also some effects from the IMO 2020 regulation, where refineries sought more crude oil to ramp up their production of compliant fuel. And also, there were some tankers that were taken off the market for scrubber retrofitting. In terms of -- the next slide, I'll be showing the deliveries and also scrapping. You can see that in 2019, there was a high level of deliveries and hardly any scrapping, as a result of which there was expansion in the fleet during 2019. However, looking forward, you can see that in 2020, the order book is much smaller. The number of deliveries expected in 2020 will drop quite a little bit. It's not known yet about the scrapping for 2020. However, there could be some price offset following the implementation of IMO 2020. Overall, this trend, I hope, goes well for charter rigs in the Petroleum segment. On Page 16 for the Offshore segment. Although there has been a softening of [ crude ] oil prices in 2019, the expectation going forward is still that it will remain relatively conducive for investment. And as a result, we should expect that there will be continued investment in offshore projects, including -- in floating production systems. So you can see here that for 2020, we expect a larger number of floater awards compared to 2019. 28 of the different vessels compared to 22 in 2019. If you look into the next slide, Page 17, this shows the distribution of the expected awards for 2020. As you -- as was the same picture last quarter, the largest number will come from Brazil. The expected number of awards in Brazil for 2020 is 8, which is an increased effect to the previous projection that we had, which was for 2019, it was 4. So we expect more to come out of Brazil for 2020. So I think that concludes the market environment. I will now move on to business update. For the fourth quarter, our LNG team continues to explore new opportunities, both in conventional as well as nonconventional segments. At the moment, our LNG fleet comprises 31 assets, of which 27 are on long-term charters, while 4 are on short-term charters. In addition, we will have 4 more LNGCs joining the operating fleet between 2021 and 2023, bringing the total LNG fleet to 35 assets. As for the Petroleum segment, during the quarter, the portfolio mix was at 72% to 28% term to spot. This is partly due to the reduced number of vessels in operation after the disposal of the chemical vessels, chemical tankers, which was previously deployed in spot. Also, all our VLCCs and 3 of our MRs were fixed on time charters in the fourth quarter to minimize earnings volatility. During the quarter, AET won a long-term charter for 3 DPSTs for Shell Brazil. The charter is expected to commence in 2022. As you will recall, in quarter 3, AET entered into an agreement with Maersk Tankers to sell 7 A Class chemical vessels. One vessel was delivered in the third quarter, 4 in fourth quarter. And the remaining 2 will be delivered in the first quarter of 2020. We also redelivered 2 of our L Class in chartered chemical tankers during the fourth quarter. As an update, I think you will know that we also announced early in February, this month, we -- the award of 3 more DPST contracts by Petrobras with charters also commencing in 2022. Just to summarize our picture for Petroleum. We had 13 DPSTs on order that include the 3 that was announced in February, all of which were backed by some charters from Equinor, Petrobras and Shell, and this is to be delivered between 2020 and 2022. This will bring our total DPST fleet to 17 assets by the time ordered DPSTs are delivered. As you know, our main strategy for the Petroleum segment is to grow our secured income, and DPSTs will go a long way towards being -- making the Petroleum segment more resilient against the cyclicality of the spot market. Moving on to Offshore. We continue to pursue new business for FPSOs, FSOs and MOPUs in Asia Pacific as well as the Atlantic Basin. And in the meantime, our Offshore segment's income will be underpinned by its existing portfolio of long-term contracts. During the quarter, FSO Angsi contract expired on 31st December 2019, expected to be demobilized. FSO Cendor was scrapped in December 2019 as well. In terms of the legal cases for the Gumusut Kakap arbitration, there is no further update in the quarter. We are waiting for a decision sometime this year. For the PCPP - MOMPL case, for the arbitration, the latest update is that MOMPL has withdrawn its arbitration Notice #2 in order to commence good faith negotiations with PCPP. As for the adjudication, in view of the recent Federal Court decision ruling that CIPAA, Construction Industry Payment and Adjudication, which only applies to contracts entered after 15th April 2014. As a result, the MOMPL lease agreement would fall outside as it is dated in 2008. As a result, MOMPL will stay its hand on moving forward for enforcement of the adjudication decision and will focus on the arbitration proceedings to recover the monies owed by PCPP. On the next slide, Page 21, for the proceedings in court. The first point on the undisputed portion of early termination fees and demobilization costs, but there is no new development during the quarter. As for the writ action against the shareholders of PCPP, the latest update is that MOMPL's appeal against PCPP stay application will be heard on 19 June 2020. Moving on to the Heavy Engineering segment, which is on Page 22. During the quarter, Heavy Engineering Offshore segment secured the EPCC of Bergading Mercury Removal Unit module and also an EPCIC contract for Bekok Oil Project, both Bekok A and B. The order book backlog as at December is MYR 3 billion, and approximately MYR 12.9 billion worth of Heavy Engineering tenders were submitted as of December 2019. So for the Heavy Engineering section, we will continue pursuing business of -- the existing business of Marine & Heavy Engineering and also expand its marine capacity through the additional new dry dock base coming on stream in 2020. At the same time, it's also exploring new business opportunities, namely modular fabrication and offshore wind farms. I think that concludes the session from me. I'll pass you back to Rozainah.

Thank you, Eslin and Vincent, for the presentation on financial performance and business update. With the completion of the presentation, I would now like to hand over the call to the event manager, who will guide and manage the Q&A session. Akarin, over to you.

[Operator Instructions] Our first question, Ajay from JPMorgan.

Three questions from me. The first one was specifically on the petroleum tanker division. Could you walk us through, of the 28% vessels which are on spot, what type of vessels these are? You did mention all the VLCCs were contracted in Q4. If you could give us a sense of the vessel type as well as how many vessels would be coming off their incumbent contracts in terms of number of vessels in Q1 2020 and Q2 2020, that would be helpful. The second question, I just wanted to clarify specifically on the vessel impairments you've done in the quarter. Can you remind us which vessels these were and how many in terms of numbers and which segment? And thirdly and lastly, just in terms of the FPSO market, could you maybe walk us through how we should be thinking about Limbayong and Mero-3 in terms of your confidence in terms of winning? And any other jobs we should be keeping an eye on?

Okay. Taking the first question regarding the term to spot ratio. For the VLCCs for fourth quarter, it was 100% on term. For Aframax, it was 74% on term. Suezmax, it was 44% on term. And chemical was 52% on term. I'm not able to share with you exactly which are coming off spot or term during first quarter.

But if you could give us a rough sense of number of vessels, at least, that we should expect coming off-line in Q1 and Q2.

We don't have that information with us to share.

Understand.

Okay. I will pass you over to Eslin for the second question on impairment.

Can you repeat the question for the vessel impairment? What do you want to know? Number of vessels?

So I wanted to get a sense of the divisions that the impairments have been seeing. Is it petroleum versus offshore versus LNG? And the second was specifically in terms of number of vessels and type of vessels that have been impaired here.

The impairment is actually -- belongs to LNG segment, not Petroleum segment as well as Offshore segment. I think [indiscernible].

So all 3?

Yes. All 3, yes. All 3 segments.

But would you give me roughly a sense? Is it equal or is it largely related to Offshore, largely related to Petroleum?

For which quarter? Is it for quarter 4?

For Q4. Q4.

Largely contributed by Petroleum segment.

What vessels are we talking about here?

Chemical vessels.

Yes. The one that I...

The ones that were delivered to Maersk.

So just to clarify because you did have something in Q3 as well. So just to be clear, the Q3 one was all largely chemical tankers, and you've continued to have some of them in Q4 as well?

Yes. Okay. Just to clarify a little bit on Rozainah's statement. The chemical vessels here refer to the, in-charter vessels, the L class that will be delivered during the quarter. We had 2 vessels in my presentation that we delivered during the quarter. These are in-charter vessel. So as a result of those redeliveries, there was some impairment.

Okay. Understood. And just lastly, on the FPSO question?

I think you asked about 2 FPSO that currently is -- that MISC is [ bidding. Of course, Limbayong, currently ], we have some [indiscernible]. And today, we are still waiting for feedback from the client. As for Mero-3, the team is gearing up for the bid submissions. And I think we have been mentioning this in some of our briefing that the EPCs for Mero-3, we are looking very closely with Sembcorp and Siemens.

Understand. And just lastly if I may. Given the big drop in tanker rates, how should we be thinking about that impact for your business in the first half of 2020? You have largely contract rates for your portfolio, but any quick commentary on how we should think about that kind of financial impact for the first half of 2020?

I think we can't see that far here into the first half. But for immediate -- looking at the immediate effect, as I mentioned, a lot of our vessels are on time charter. So we don't see any major impact immediately, unless huge drops in -- or time charter rates across the board for a prolonged period. So for LNG [indiscernible] time charter as well. So those are for long-term contracts.

Our next question, Alex Goh from Am Research.

I have 3 questions. The first one is regarding the Petroleum segment. You've indicated that the petroleum days have -- are reduced. Could you tell us how many days has it fallen short off? And which vessels were redesignated because of this that caused the lower number of days? That's my first question. My second question is on your associate contribution. It has dropped quite significantly from the third quarter to the fourth quarter. Could you just run through it with us what was the cause of that drop in associate contributions? And my third question is regarding the COVID-19. Now we've seen that tanker rates have dropped quite significantly from December until now. And I'm just wondering, how much of that is due to seasonality? And how much of that is due to the impact of the COVID-19? Could you just give us a feel of how is that affecting charter rates, not just in China but perhaps globally? Is there any impact of the -- of a less [ rate ] or less -- or oversupply of vessels now that the China vessels are affected? The other piece, does this also affect offshore projects in terms of the projects that you are expecting to reach final investment decisions? Do you get a feel that the clients are deferring on the go-ahead for these projects?

Okay. I think the -- it's quite a long -- we might ask you to recap the questions again. But let me go back to the first question, lower number of days, right, operating days. I think broadly speaking, what we mean is that the number of vessels, because of the disposals, we actually reduced our fleet by -- petroleum fleet by 6 vessels during the quarter. Four were delivered to Maersk and 2 were redelivered -- being in-charter vessels. So those were the vessels that contributed to the overall reduction in trading days during the quarter. So basically the -- our fleet has reduced in size. So the [ effect is that ]. Does that address your question?

Yes, sure. Now I'm just wondering, why did these 2 vessels that were in-charter, what did you need to make a provision for that -- or impairment on that? I mean these are presumably new vessels.

They are not new vessels. I think the decision was made because our chemical fleet has not been performing well for some time, and we were -- actually, some of these vessels were also underperforming. As a result, we took a decision to take the cut. We take a cut loss in this year rather than impair our performance going forward towards the end of their normal -- the charter period. Associated. You asked about...

The JV.

Yes. Associate performance.

Okay. The share of profit dropped between quarter 4 2019 versus quarter 4 2018, mainly due to the onetime gain from the FSO Ruby contract extension as well as there are some repair and maintenance cost which was recorded in the previous quarter for one of our JV companies.

So would you say that the fourth quarter is the actual run rate for your group?

What do you mean by that? Can you repeat your question, please?

The fourth quarter, would that be the recurring income that you normally see from your -- for your associates?

No. I think there would have been some one-off items there as well. We just compared the previous year to the current year. Previous year was about MYR 280 million versus current year of MYR 250 million. And in both this year, they were one-off items.

How much were the one-off items in both?

This was the Ruby, right? There was about USD 13 million for Ruby extension in 2018, USD 10 million this year. And also, we had a contract, this is USD, contract extension for [indiscernible] of about USD 9 million in the prior year. So that means last year was probably about USD 22 million. This year, it was about USD 10 million. And on top of that, there was the reimbursement of costs, right, for the Brazilian asset.

Okay. So you would say that the one-off item is about, what, USD 30 million for the fourth quarter, is it?

No, no, no. For the whole year last year, there was probably about USD 30 million one-off items in certain the JV numbers. Whereas this year, there's probably about USD 11 million, right?

Okay. When you say this year, you are referring to 2019, is it?

Correct.

Okay. I -- to address your last question, let me recap, you wanted to know the [ recurring sales ] [indiscernible], how much was it due to seasonality versus COVID-19. It's a very difficult question to answer, I can only point you to the rates for January that probably because the COVID thing probably, caught a lot of attention to us end of January onwards. So for the whole month of January, we can see that the VLCC rates fell by 25%, Aframax by 23% compared to December. So maybe that gives a view of the seasonal -- more of the seasonal impact in that number. Any further falls may also have been contributed by the COVID-19 impacts. So -- but otherwise, I think it's very difficult to separate the 2.

Okay. And for your offshore projects?

Offshore projects are mainly driven by oil prices. I think the question is whether if the coronavirus outbreak can be contained within a few months, I don't think that will be significantly affecting the long-term view of oil prices. Secondly, I think the -- from the South American Basin, I mean, they are less affected by -- directly by China event.

Our next question, Ben from Macquarie.

I just -- I have a question on the demobilization costs. I can see if I add up all the one-offs in your presentation slides, it kind of adds up to the impairment losses for the fourth quarter, about 113 million, 114 million. So does this one-off in your slides exclude then the demobilization costs? How should we think about that?

Yes. Demobilization cost is put under the profit before tax, which is our normal operation. And it's not a one-off item. That is how we classify this demobilization.

I see. How much was the demobilization costs?

Teens. Mid-teens.

Mid-teens dollars?

Yes.

Okay. Then you are going to have more demobilization costs in first quarter, am I right? Could you give us a sense of how much that is?

Not that I'm aware of.

For FSO Angsi? I think it was mentioned that some demobilization costs in one -- in first quarter.

That was not mentioned.

This is the one that we are talking about, relating to Angsi.

The fourth quarter demobilization cost is for Angsi?

Yes.

But the contracts, by it, in 31st December, so -- but the cost was recognized in the fourth quarter?

It's a provision.

It's just a provision.

I see. Okay. So no more demobilization costs in the first quarter, is that right?

No.

There will be no. Yes.

Okay. Just moving on to the chemical tankers. Could you give us a sense of how much losses the chemical tankers were costing you? And by extension, how much savings you'll see, so to speak, next year, following the disposals?

I think we can use the figure of USD 5 million per quarter.

Okay. And you mentioned that the bulk of the impairments was for the chemical tankers. But could you give us a sense of how much of the impairments was for that? I mean, could you give a number for each segment? How much the impairments were?

Can you repeat the question?

Could you give us a breakdown of the asset impairments by segment?

Yes. Basically, 60% would have come from the Petroleum, then roughly about 30% coming from Offshore, then the balance coming from LNG.

Okay. May I ask why you're impairing the Offshore and LNG segments?

These are normal review of assets approaching expiry, where we need to assess the value and use. And if the fair value is impaired, then we have to [ make an adjustment ].

Okay. All right. Very quickly on the LNG segment, you mentioned lower dry docking days. Any number you can put to it so we -- just so we know what the normalized rate should be?

It's -- let me see that. Yes, it's less than 120 days.

For the -- sorry, for the fourth quarter?

That's right.

Sorry, the drydocking was less than 120 days in the fourth quarter?

Yes.

What was it averaging for the first 9 months, for example?

[ Thereabouts.]

So the fourth quarter was not exception in terms of the dry docking?

Yes. It was slightly lower than the third quarter, but it was comparable to the first and second quarter.

Okay. And I just want to check. Do you have any LNG charters due for rollover in the next 6 months?

No.

Okay. And last off, could you give a bit more color on the JV -- your joint ventures and associates, the drop in the earnings, are there any one-offs in there in the fourth quarter? I know you sort of talked about it on a full year basis. I just want to narrow down to the fourth quarter. Are there any one-offs in there?

In the fourth quarter, it was -- the one-off items was in the fourth quarter of 2018.

Okay. So no one-off items in 2019?

Not in the fourth quarter.

UOB Kay Hian.

I have a few questions. I want to ask first on the -- your LNG spending in your slides. I know you said you have lower vessel drydocking, but I think to compare your fourth quarter 2019 versus your third quarter 2019, why did your PBT weaken on a quarter-on-quarter basis versus the third quarter?

Sorry, can you repeat it up because -- can you speak closer to the phone, please?

Sure, sure. Can you hear me? Is it clear?

Yes. Yes. Yes.

Okay. Referring to your Slide 7, I'm looking at your LNG segment, your third quarter PBT was USD 57.5 million. Your fourth quarter, if I add back the one-off items, it is around USD 54 million. So there is some weakness on the quarter-on-quarter drop even though you say there's lower drydocking in the fourth quarter. So what caused the PBT to drop?

Yes, it was basically some drydocking-related costs, which were only finalized in the current quarter.

Meaning carryforward from third quarter, is that what you mean? These are -- [ what's the cause? ]

Correct.

Okay. Okay. My next question is on the -- on your Offshore. So I think the Offshore slide is quite confusing, but I just want to know, on your Offshore business, your PBT, right, if I add back the nonrecurring items, it is roughly -- it is below USD 20 million on the PBT level. Would that be your expected recurring quarterly PBT level moving forward? Because you used to do a much higher number in the previous quarters on a recurring basis.

Yes. The current quarter is slightly lower because of lower shares of profit from our joint ventures. And also, there was the high impairment.

Yes. Correct, but your impairment will be under the nonrecurring item, right? So if I add back the nonrecurring item, your recurring...

Yes. So the recurring income -- the recurring profit from the offshore sector, based on the current assets, is probably between USD 20 million to USD 30 million.

I see. Okay. That also assumes the JV income level to be the same level as the fourth quarter 2019 going forward, is it?

Yes. Yes, in pursuit of JV income.

In pursuit of JV income. Okay, noted. All right. I just want to check on your new deliveries, yes, I know you say the shuttle tankers would be by first half, but any of them who are expected to contribute in the first quarter of 2020 or more like all 4 of those would be in the second quarter?

You're talking about DPST, right?

Yes, the DPST, correct.

Yes. I think 2 new DPST to contribute to our financial performance in quarter 1 2020.

Okay. So 2 [ instance ], 2 in first quarter, 2 in second quarter? Just to double confirm.

Sorry. What was your clarification this time?