MRCB 3Q net profit falls 4.4% on higher expenses

KUALA LUMPUR (Nov 21): Malaysian Resources Corp Bhd’s (MRCB) third quarter net profit dropped 4.4% to RM28.09 million or 1.28 sen per share from RM29.39 million or 1.49 sen per share a year earlier, partly due to higher expenses.

The group’s financial statement for the quarter ended Sept 30, 2017 showed that its expenses more than doubled to RM1.06 billion from RM470.53 million previously.

Quarterly revenue also more than doubled to RM1.13 billion from RM551.22 million and was mainly derived from its engineering, construction and environment division.

MRCB said the bulk of the division’s revenue was contributed by infrastructure projects, and the ongoing construction of property development projects, as well as several commercial buildings for clients in Johor, power transmission related construction projects in Peninsular Malaysia, and other civil engineering projects in the Klang Valley.

MRCB said the cumulative nine-month net profit fell 21.9% to RM61.92 million from RM79.28 million a year earlier, though revenue climbed 75.5% to RM2.42 billion from RM1.38 billion.

The group attributed the encouraging growth in revenue to the engineering, construction and environment division, whose revenue jumped 236.7% to RM1.61 billion during the period. The division’s operating profit rose 365.7% to RM46.5 million helped by an improvement in operating margins, which increased year-on-year to 2.9% from 2.1%.

The group said its property development and investment division recorded a 9.6% decrease in revenue to RM660.7 million in the January-September period, largely due to the completion of Sentral Residences in KL Sentral and Easton Burwood development in Melbourne, as well as new projects still being in the early phase of construction.

Consequently, the operating profit for that division declined 38.8% to RM112.5 million, excluding gains of RM44.4 million arising from the disposal of non-core assets, in comparison with the corresponding financial period in 2016.

“The ongoing 9 Seputeh mixed development in Jalan Klang Lama, the en-bloc office towers sold at PJ Sentral Garden City and Menara MRCB in Putrajaya were the main contributors to the division’s (property development and investment) revenue and operating profit,” it said.

“I am very encouraged by these results,” said group managing director Tan Sri Mohamad Salim Fateh Din. “We anticipate that the engineering, construction an environment division will play a more dominant role in our future performance, so it is pleasing to see the improvement in the division’s operating margins and its order book wins.”

“The recent completion of our RM1.732 billion rights issue has significantly strengthened our balance sheet, and we are well positioned to fund future growth,” added Mohamad Salim.

Shares in MRCB fell 2.5 sen or 2.50% to 97.5 sen, for a market capitalisation of RM4.28 billion. — theedgemarkets.com

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