Mudajaya continues losing streak in 1Q

KUALA LUMPUR (May 31): Mudajaya Group Bhd started its financial year 2017 with a net loss of RM26.75 million in the first quarter ended March 31 (1QFY17), no thanks to having to account for its associates' losses, while revenue fell.

It was the group's fourth consecutive quarter in the red. A year ago, it recorded a net profit of RM5.95 in 1QFY16.

Its latest quarterly revenue fell 12% year-on-year to RM156.99 million, from RM177.45 million, its Bursa Malaysia filing today showed.

Segmentally, construction profit before tax (PBT) fell 54% y-o-y to RM2.4 million, from RM5.2 million, on the near completion of a few Pengerang projects, while newly-secured ones have yet to start. 

Its property development segment PBT was down 37% to RM2.4 million, from RM3.8 million, on lower property sales. Meanwhile, its power segment fell into the red with a loss before tax of RM25.9 million — from a PBT of RM200,000 previously — as its Indian associate RKM Powergen Private Ltd (RKM) only commenced power sales in April.

Its others segment — primarily manufacturing and trading divisions — was also in the red with an LBT of RM4 million, versus a PBT of RM40,000 a year ago, on higher funding costs.

Going forward, Mudajaya said it is confident of benefitting from some of these proposed mega infrastructure projects such as the Pan Borneo Sabah highway and the light rail transit (LRT) Line 3. Its order book stands at RM2.4 billion as at end of March 2017, which would sustain its operations in the medium term, it said.

The investment in the independent power producer (IPP) project in India via its 26%-owned RKM, however, continues to be "very challenging" for the group.

“Despite limited control and influence, the management continues to make strenuous efforts with RKM to ensure that all four units of the IPP development come on stream to enhance the value of assets, in addition to providing recurring income to the group.

“RKM notified the company that its Unit I has commenced sales of 200 MW power in April 2017 and 150 MW power in May 2017, to several power distribution companies in Uttar Pradesh, India, pursuant to the Power Purchase Agreement dated March 15, 2016,” Mudajaya said.

In terms of new investment, the group said it will continue to pursue investments both locally and overseas, to build up its assets with recurring income streams to cushion against the cyclical nature of the construction business.

“It will also expand its precast concrete manufacturing businesses to capitalise on the increasing demand from various mega-infrastruture projects,” it added.

Mudajaya’s share price closed up three sen or 2.01% at RM1.52 yesterday, for a market capitalisation of RM807.60 million. — theedgemarkets.com

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