MMC Corp’s 1Q19 earnings rise to RM88.5m, fuelled by ports biz

For the port and logistics segment, the division revenue is RM780m, an increase of 19.2% compared to RM654m in 1Q18

By SULHI KHALID / Pic By TMR

MMC Corp Bhd’s net profit rose 37% to RM88.5 million for the January through March 2019  (1Q19) period as the port business continues to play a great role to the group revenue stream.

The utility and infrastructure conglomerate posted a revenue of  RM1.14 billion for the period under review, a 10.7% drop from RM1.28 billion reported in the corresponding quarter.

The revenue decline was attributed to lower contribution from the Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRT SSP) Line underground works following revision of contract in November 2018, as well as lower progress from the Langat Sewerage project.

For the port and logistics segment, the division revenue was RM780 million, an increase of 19.2% compared to RM654 million in 1Q18.

The segment’s net profit rose by 55% to RM103.9 million compared to RM67 million posted a year ago.

“The increase in the segment’s net profit is boosted by higher contribution from Johor Port Bhd and Northport (M) Bhd, as well as a full consolidation of Penang Port Sdn Bhd’s result,” the company said in a filing to Bursa Malaysia.

Meanwhile, its energy and utilities (E&U) unit declared a 17% decrease in net profit to RM31.5 million due to higher operation and maintenance cost at Malakoff Corp Bhd.

As for its engineering segment, it recorded a decrease of 44% in its revenue and 33% in net profit, underpinned by lower contribution from the SSP Line underground works.

On its outlook, the group expects its port and logistics unit to record positive volume growth across all the ports.

“Continuous investment into the ports’ infrastructure, capacity and capabilities, together with the execution of operational plans are expected to deliver positive results,” the company said.

The group added that Gas Malaysia Bhd and Malakoff are expected to contribute positively to the E&U division.

For its engineering segment, substantial existing orderbook provides earnings visibility for the division anchored by the KVMRT SSP Line underground and elevated work.

“The earnings contribution from the engineering segment will be sustained by ongoing projects including the Langat 2 Water Treatment Plant and Langat Centralised Sewerage Treatment project,” it said.

The conglomerate’s stock closed higher yesterday by three sen to RM1.02, valuing the company at RM3 billion.