MMC’s 2Q earnings more than tripled YoY to RM67.2m

The growth is attributed partly to higher contributions from PTP and lower operating costs at Johor Port and Northport

By FARA AISYAH / Pic By ARIF KARTONO

MMC Corp Bhd’s net profit for the second quarter ended June 30, 2019 (2Q19), reported a threefold increase to RM67.23 million from RM20.08 million achieved in 2Q18.

The growth was attributed to higher contributions from the Port of Tanjung Pelepas (PTP), lower operating costs at Johor Port Bhd (JPB) and Northport (M) Bhd (NMB), gain on the disposal of an asset held for sale and lower administrative costs across the group.

According to a statement by MMC, its earnings per share for the three months was higher at 2.2 sen, compared to 0.7 sen in 2Q18.

The company’s quarterly revenue increased slightly to RM1.23 billion from RM1.2 billion recorded in the previous year, as a result of higher volume handled at PTP and effects from the consolidation of Penang Port Sdn Bhd’s (PPSB) revenue.

MMC added that the growth was offset by lower progress from the Langat Sewerage project.

For the first half of 2019 (1H19), MMC’s earnings rose 96.58% year-on-year (YoY) to RM120.74 million, against RM61.42 million in the same period last year, mainly due to higher contributions from port entities, gain on the disposal of an asset held for sale and lower administrative costs.

However, its revenue for 1H19 slightly decreased to RM2.37 billion from RM2.48 billion in 1H18 due to lower contributions from the Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRT SSP) Line — following the revision of contract in November 2018 — and lower progress from the Langat Sewerage project.

MMC’s ports and logistics segment recorded RM1.58 billion of revenue in 1H19, an increase of 13.4% YoY from RM1.39 billion, which is mainly attributed to the effect from the full consolidation of PPSB’s revenue and higher volume handled at PTP.

The segment recorded a higher profit before zakat and taxation by RM85.8 million to RM222.4 million in the six months, compared to RM136.6 million reported in 1H18, due to a higher volume handled at PTP, lower operating cost at JPB and NMB, higher share of results from Red Sea Gateway Terminal Co Ltd and full consolidation of PPSB’s result.

Meanwhile, the engineering segment recorded a revenue of RM740.4 million in 1H19, 29% lower YoY compared to RM1.04 billion in 1H18 due to lower contributions from the KVMRT SSP Line and lower progress from the Langat Sewerage project.

The segment also posted a 21.8% YoY decrease in profit before zakat and taxation to RM119 million from RM152.2 million reported in 1H18 due to lower contributions from the KVMRT SSP Line and Langat Sewerage project.

MMC’s investment holding, corporate and other segments recorded a revenue of RM50.9 million during the six months, a 17.8% YoY increase from RM43.2 million in 1H18 due to higher passenger volume at the Senai International Airport, Johor.

The segment’s loss before zakat and taxation in the period was lower at RM181.2 million, compared to RM248.9 million in 1H18, mainly due to its gain on the disposal of an asset held for sale, lower finance costs incurred and lower administrative costs.

MMC expects to strengthen its capabilities with a focus on operating performance and efficiency, while exploring new opportunities.

“Continuous investments into the ports’ infrastructure, capacities and capabilities along with the execution of operational plans are expected to deliver positive results. Operational and cost synergies driven by MMC would further improve the performance of its ports and logistics division.

“The energy and utilities division is expected to contribute positively from the group’s associated companies, namely Malakoff Corp Bhd and Gas Malaysia Bhd,” the company’s statement read.

The group added that substantial existing orderbook provides earnings visibility for the engineering division anchored by the KVMRT SSP Line.

It said the earnings contribution from the engineering division will be sustained by ongoing projects including the Langat 2 Water Treatment Plant and Langat Centralised Sewage Treatment Project.

MMC’s counter remained unchanged at RM1.08 yesterday, with a market capitalisation of RM3.29 billion.