MMC Corp’s 2Q20 earnings rise 15%


MMC Corp Bhd’s earnings for the second quarter ended June 30, 2020 (2Q20), jumped 15% year-on-year (YoY) to RM77.36 million on higher share of results of associates, namely Malakoff Corp Bhd, and gains made on the sale of land at Senai Airport City.

The group also benefitted from lower operating expenses as revenue for the quarter fell 19.47% YoY to RM990.68 million due to lower progress at the Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRT-SSP) Line project, as well as lower passenger and cargo volumes at Senai International Airport.

“This was along with lower volume handled across all ports, affected by the unprecedented Movement Control Order,” MMC said in a Bursa filing yesterday.

For the six months, MMC’s net profit rose 12.01% YoY to RM135.24 million helped by the higher volume handled at Pelabuhan Tanjung Pelepas (PTP) and higher contribution from Johor Port Bhd as a result of the gains made on the disposal of an asset held for sale. The earnings were also boosted by the higher share of results at Malakoff.

These were offset by lower contributions from Northport Bhd and Kontena Nasional Bhd, as well as lower passenger and cargo volumes at Senai International Airport, MMC stated.

Revenue for the six months fell 12.47% YoY to RM2.08 billion due to lower work progress on the KVMRT-SSP Line, lower passenger and cargo volumes at Senai Airport, lower volume handled at Northport, Johor Port and Penang Port Sdn Bhd, and lower contribution from logistics services Kontena Nasional.

“These were partially offset by higher volume handled at PTP.”

MMC noted the challenging business environment in view of the global economic contraction arising from the ongoing Covid-19 pandemic.

It said its port and logistics division continues to focus on resource optimisation amid the improving global container volume outlook.

“Continuous vigilant investments into the ports’ infrastructures, operational efficiency and cost-synergy initiatives across the group are expected to be the key drivers to the overall port and logistics performance.

“The energy and utilities division is expected to contribute consistent earnings from its two associated companies, namely Malakoff and Gas Malaysia Bhd,” it said.

MMC added that the engineering division is expected to provide earnings visibility for the group from its substantial existing orderbook, anchored by the KVMRT-SSP Line project.

“The division remains active in its effort to replenish its orderbook, while focusing on the execution and timely completion of its existing projects,” it said.

MMC is committed to strengthening its market position by focusing on operational performance and cost optimisation, while exploring new opportunities.

Its chairman Tan Sri Shamsul Azhar Abbas has resigned from his post to pursue other business commitment.

MMC Corp’s shares closed 5.19% or three and a half sen higher at 71 sen yesterday, valuing the utilities and infrastructure group at RM2.16 billion.