MMC’s earnings jump 70% to RM66m in 3Q

By SHAZNI ONG / Pic By TMR File

MMC Corp Bhd’s net profit surged 70% year-on-year (YoY) to RM66.34 million in the third quarter ended Sept 30, 2019 (3Q19), from RM38.94 million a year ago, while earnings per share rose to 2.2 sen from 1.3 sen recorded last year.

The performance was attributed to higher work progress from the Mass Rapid Transit (MRT) Sungai Buloh-Serdang-Putrajaya (SSP) Line, gain on disposal of an asset held for sale, lower administrative costs and oil spill compensation at Port of Tanjung Pelepas (PTP) in Johor.

Higher contribution from Mala-koff Corp Bhd due to improvements at its coal plants, lower barging and demurrage cost, lower finance cost and fair value gain on acquisition of a subsidiary, also boosted the utilities and infrastructure group’s 3Q19 earnings.

“These were offset by no recognition of negative goodwill of RM51.7 million upon finalisation of Penang Port Sdn Bhd’s (PPSB) purchase price allocation exercise, higher operating expenses at PPSB, as well as higher finance cost and depreciation due to the adoption of Malaysian Financial Reporting Standard 16 leases,” it said in an exchange filing yesterday.

Quarterly revenue rose 32% YoY to RM1.25 billion from RM944.08 million a year ago on higher work progress from the MRTSSP Line, offset by lower progress from the Langat Sewerage project.

For the nine months ended Sept 30, 2019, the group’s net profit jumped 86.4% YoY to RM187.08 million from RM100.37 million previously, mainly on higher contributions from port entities and the MRTSSP Line, gain on disposal of assets held for sale and lower administrative costs.

Revenue was up 5.7% YoY at RM3.62 billion versus RM3.42 billion last year due to higher work progress from the MRTSSP Line, consolidation of PPSB’s revenue and higher volume handled at PTP.

Going forward, continuous investments into the ports’ infrastructure, capacities and capabilities along with the execution of operational plans are expected to deliver positive results for the firm.

“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 and Gas Malaysia Bhd,” it said.

A substantial existing orderbook also provides earnings visibility for the engineering division, anchored by the MRTSSP Line.

“Furthermore, the earnings contribution from the engineering division will be sustained by ongoing projects,” the company added.

Shares of MMC closed 1.5% lower at 98 sen yesterday, valuing the company at RM2.97 billion.