Revenue for the logistics and engineering firm increased almost 20% to RM1.1b for the quarter under review
By ALIFAH ZAINUDDIN / Pic By TMR
Infrastructure and utility conglomerate MMC Corp Bhd recorded a higher revenue for the third quarter ended Sept 30, 2017 (3Q17), as income increased across its business segments.
Revenue for the logistics and engineering company increased almost 20% to RM1.1 billion for the quarter under review, compared to RM888.8 million in the corresponding period last year on the higher work progress from the Klang Valley Mass Rapid Transit-Sungai Buloh-Serdang-Putrajaya (KVMRT-SSP) Line, the Langat Sewerage Treatment project, coupled with higher volume handled at Pelabuhan Tanjung Pelepas Sdn Bhd (PTP) and Johor Port Bhd (JPB).
MMC said profit before zakat and taxation for the 3Q decreased to RM69.7 million compared to RM124.1 million reported in 3Q16.
MMC, which is also the country’s largest port operator, said the drop was due to the RM98 million one-off impairment provision for SMART (Stormwater Management and Road Tunnel) due to the lower projected traffic volume and the absence of land disposal gains from MMC Tepat Teknik Sdn Bhd.
However, the drop was compensated by higher through-put handled at PTP and JPB and the deposit forfeiture for the land sale transaction at Senai Airport City.
Revenue for the first nine months of 2017 stood at RM2.9 billion, or 5.4% higher, compared to RM2.8 billion recorded over the same cumulative period the previous year. Net profit for the quarter fell to RM22.3 million compared to RM105.9 million in 3Q16.
The ports and logistics segment recorded a revenue of RM2.1 billion compared to RM2 billion in the previous year. The company’s investment holding, corporate and others segments also posted a 3% increase in revenue to RM62.2 million due to an upward revision of water bulk sales rate from Aliran Ihsan Resources Bhd, as well as improved passenger volume at Senai Airport in Johor.
The group remains optimistic of its prospects driven by good performances of its operating companies together with contributions from ongoing construction projects.
The completion of a 49% acquisition in Penang Port Sdn Bhd and the proposed acquisition of the remaining 51% equity interest for a cash consideration of RM220 million is expected to contribute positively to the group’s future earnings as it would allow full consolidation of the port as a wholly owned subsidiary.
The acquisition would expand MMC’s foothold in the northern region of Peninsular Malaysia and complement its strategic presence throughout the Straits of Malacca.
Substantial existing order- book provides earnings visibility for the engineering and construction division anchored by the KVMRT-SSP Line under- ground work and the company’s project delivery partner role for the public transportation network’s elevated portion.
Meanwhile, earnings contribution from ongoing projects, namely the Langat 2 Water Treatment Plant, Langat Centralised Sewerage Treatment Project and the Pan Borneo Sabah Highway will be sustained.