MMC’s Q3 net profit more than doubles

> Earnings hit RM38.94m in absence of one-off provision for impairment

PETALING JAYA: MMC Corp Bhd’s net profit for the third quarter ended Sept 30, 2018 more than doubled to RM38.94 million from RM18.94 million a year ago, in the absence of provision for impairment.

In a filing with Bursa Malaysia yesterday, the group said its pre-tax profit for the quarter was higher mainly due to the absence of a one-off provision for impairment of RM98 million on Stormwater Management and Road Tunnel as a result of lower projected traffic volume; and recognition of negative goodwill of RM51.7 million from acquisition of remaining 51% equity stake in Penang Port Sdn Bhd.

Penang Port is a wholly owned subsidiary of MMC Port Holdings Sdn Bhd, which in turn is a wholly owned subsidiary of MMC.

This was offset by lower contribution from Johor Port Bhd and Northport (Malaysia) Bhd; Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRTSSP) Line and no forfeiture deposit on land sale transaction at Senai Airport City

Revenue for the quarter fell 10.58% to RM944.08 million from RM1.06 billion a year ago due to lower work progress from KVMRT-SSP Line, lower contribution from Rapid Material Offloading Facilities operations at Johor Port and lower container volume handled at Northport.

These were cushioned by work progress at Langat Sewerage Treatment project, higher volume handled at Pelabuhan Tanjung Pelepas as well as effect from consolidation of Penang Port’s revenue.

For the nine months ended Sept 30, 2018, net profit fell 25.59% to RM100.37 million from RM134.87 million a year ago while revenue rose 17.06% to RM3.42 billion from RM2.93 billion a year ago.

Moving forward, the group expects its ports and logistics division to record stable volume across all ports while the completion of acquisition of the balance 51% interest in Penang Port in May 2018 will contribute positively to the group’s earnings.

The energy and utilities division is expected to contribute positively from the group’s associated companies namely Malakoff and Gas Malaysia.

In the engineering division, substantial existing order book provides earnings visibility, anchored by the KVMRT-SSP Line underground work and elevated portion. Earnings from this division will also be sustained by the Langat 2 Water Treatment Plant, LSTP and the group’s involvement in the Pan Borneo Sabah Highway.

“We are optimistic of our performance and will continue to improve our operations, intensify our cost optimisation efforts and explore new business opportunities,” said MMC group managing director Datuk Seri Che Khalib Mohamad Noh in a statement.