MMC’s 1Q revenue rises 38% but profit hit by ports

Group’s outlook remains positive with existing businesses and ongoing projects expected to provide sustained income

by TMR / pic by AFIF ABD HALIM

MMC Corp Bhd reported a 38.3% year-on-year (YoY) rise in revenue for the first quarter ended March 31, 2018 (1Q18), to RM1.28 billion due to work progress made on the Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line (KVMRT-SSP Line).

The company also attributed the gain to its Langat Sewerage Treatment project, as well as higher volume handled at Pelabuhan Tanjung Pelepas (PTP).

Net profit for the period eased to RM41.3 million, or earnings per share (EPS) of 1.4 sen, compared to a net profit of RM56.1 million, or EPS of 1.8 sen, in 1Q17.

This is mainly due to a lower contribution from the Refinery and Petrochemical Integrated Development Project’s (Rapid) Material Offloading Facilities operations at Johor Port Bhd, as Rapid is nearing completion, and a lower container volume handled at Northport Malaysia Bid due to shifting of global shipping alliances, the diversified group noted in a release on Monday.

Profit also fell due to a lower share of profit from independent power producer Malakoff Corp Bhd, which saw a lower contribution from Segari Energy Venture Sdn Bhd’s plant and a lower fuel margin recorded at coal plants.

The group remains positive on its outlook ahead, with existing businesses and ongoing projects expected to provide sustained income.

MMC, in the Monday release, noted that its ports and logistics division is expected to register higher revenue across all its ports and from the consolidation of earnings from the newly acquired Penang Port Sdn Bhd (PPSB).

The group expects its operational and cost synergies would improve the financial performance of the ports and logistics division.

“The energy and utilities division will continue to contribute positively from the group’s associated companies, namely Malakoff and Gas Malaysia Bhd,” the group noted.

MMC’s existing orderbook provides earnings visibility for the engineering division,  anchored by the KVMRT-SSP Line’s underground work and its project delivery partner (PDP) role for the elevated portion.

“The earnings contribution from the engineering division will be sustained by ongoing projects, namely Langat 2 Water Treatment Plant, Langat Centralised Sewerage Treatment Project and our involvement in the PDP role for Pan Borneo Sabah Highway.”

MMC’s ports and logistics division recorded revenue of RM655 million in 1Q18, compared to RM713 million previously, and a pretax profit of RM67 million, from the RM124 million reported in 1Q17, despite higher volume handled at PTP and a share of profit from PPSB.

The energy and utilities division recorded a pretax profit of RM38 million in 1Q18, compared to RM49 million in 1Q17, on a lower share of profit from Malakoff.

The engineering division’s pretax profit increased to RM74 million in 1Q18 from RM26 million a year ago.

The group’s other remaining businesses recorded a revenue of RM21 million in 1Q18, compared to the RM19 million reported in 1Q17, due to an increase in passenger volume at the Senai International Airport.