Mega First’s net profit climbs in 2Q on higher volume


MEGA First Corp Bhd’s net profit for its second quarter ended June 30, 2021 (2Q21), rose 7.4% year-on-year (YoY) to RM87.32 million on higher sales across all three core divisions of renewable energy (RE), resources and packaging. 

Its 2Q21 revenue rose 14.7% YoY to RM207.84 million while earnings per share declined to 9.22 sen from 9.47 sen in 2Q20. 

“RE division’s revenue came in 5.9% higher at RM138.2 million, driven by a 10.6% increase in hydro energy sales volume in Laos, partially offset by a stronger ringgit. 

“Revenue for the resources and packaging divisions increased 33.3% to RM35.5 million and 38.9% to RM30 million, respectively,” the company noted in an exchange filing yesterday. 

The packaging division saw increased orders for paper packaging products from overseas customers and higher domestic demand for flexible packaging products. 

Mega First expects its Don Sahong hydropower project’s equivalent availability factor (EAF) to rise again in 4Q21 to levels similar to 4Q20. 

“The average EAF for 2021 is expected to be better than in 2020 (86.4%) and this would translate into higher earnings for the group in 2021 compared to 2020,” it said. 

For its solar commercial and industrial (C&I) projects, earnings will benefit from the commissioning of new C&I projects totalling 13 megawatts in May 2021. 

The resources division is expected to face multiple challenges in the remaining months of this year as demand for lime products is expected to soften due to weaker exports as a result of container shortages and high freight rates. 

Mega First stated that the acquisition of a 75% interest in Stenta Films (M) Sdn Bhd was completed on July 28, 2021, and the consolidation of the earnings from August 2021 is expected to significantly lift the group’s packaging division in the second half of this year. 

It added that the ongoing plant expansion could be completed by December 2021, a three-month delay from the September timeline earlier, besides putting on hold the planned construction of a new factory on the recently acquired 4.21ha of land.