Utilities and cement ops drag down YTL profit

PETALING JAYA: YTL Corp Bhd reported earnings of RM147.7mil in its second quarter ended Dec 31, 2016 (Q2’16), a 37% drop from a year earlier, mainly due to the weaker results of its utilities and cement businesses.

The group, which is also involved in construction, property development and investment, and hotel operations, told Bursa Malaysia that its revenue slipped 8% to RM3.62bil compared with the preceding year’s corresponding quarter.

On the utilities segment, which contributes more than 60% of the group’s revenue and profit, YTL Corp said the division’s pre-tax profit fell 36% to RM253.3mil in the quarter under review.

It attributed this to the absence of revenue from the power-generation (contracted) division, following the expiry of YTL Power Generation Sdn Bhd’s power purchase agreement with Tenaga Nasional Bhd in September 2015, as well as the lower fuel oil price experienced by its merchant multi-utilities operation in Singapore.

As for the cement manufacturing and trading business, it posted a 42% drop in pre-tax profit to RM96.4mil due to competitive pricing and a lower sales volume.

In contrast, the hotel segment saw a notable 82% jump in pre-tax profit to RM34.6mil, mainly spurred by the better performance of YTL Majestic Hotel Sdn Bhd and Niseko Village KK in Japan.

Year-to-date, YTL Corp’s earnings declined 32% to RM298mil on a 15% lower revenue of RM7.11bil.

YTL Power International Bhd, which is 47.3% owned by YTL Corp, meanwhile, posted earnings of RM166.8mil in the October-December quarter, down 45% from a year ago. YTL Power, whose businesses include water and sewerage and mobile broadband network services, said its revenue slid 6% to RM2.46bil compared with the corresponding quarter in 2015.

It attributed the lower earnings to a one-off gain from an arbitration award on recovery of impairment of receivables before tax of RM152.6mil, and interest income of RM38mil in the power-generation (contracted) segment.

Adjusting for the one-off gain, YTL Power’s pre-tax profit would have been RM196.5mil in the fourth quarter of financial year 2015.

Therefore, the company said, its profit for Q2’16 grew 22% compared with the corresponding period of 2015, mainly due to the better performance of the mobile broadband and multi-utilities business segments.

Meanwhile, YTL Hospitality Real Estate Investment Trust (Reit) – whose high-value assets include the Sydney Harbour Marriott, JW Marriott Hotel Kuala Lumpur, Ritz Carlton Kuala Lumpur and Hilton Niseko Village in Japan – widened its net loss to RM8.5mil in Q2’16 from a loss of RM1.3mil in the same quarter of FY15.

The higher loss was mainly due to the additional loss on an unrealised foreign currency translation of RM16.8mil on the Australian dollar-denominated term loan.

The Reit’s Australian properties contributed 75.7% of the group’s total revenue of RM119.2mil, which was up slightly from RM117.1mil a year earlier.