MMC’s earnings halved on tapering of MRT job, lack of land sales gain

  • Corporate News
  • Monday, 28 Aug 2017

Port of Tanjung Pelepas (PTP) in Gelang Patah, Johor.

KUALA LUMPUR: MMC Corp Bhd’s earnings for the second quarter (Q2) ended June 30 were cut by half to RM62.92mil compared to a year earlier. 

The diversified group, which provides logistics, public utility, and engineering services, attributed this to the gain on sale of land at Senai Airport Free Industrial Zone in Q2 last year, substantial completion of the Klang Valley Mass Rapid Transit Sungai Buloh-Kajang (SBK) Line and lower contribution from Tanjung Bin Energy’s power plant due to outages.

These were offset by better performance at Johor Port Bhd and Northport (M) Bhd, which saw higher throughput, it told Bursa Malaysia in its interim financial results report.

Revenue for the quarter was marginally lower at RM944.42mil compared to RM950.25mil in the year-ago period.

For the entire six-month period to June 30. MMC, whose substantial shareholders include Permodalan Nasional Bhd, Lembaga Tabung Haji and Employees Provident Fund, posted 33% lower earnings of RM118.06mil.

This contraction, occurring on the back of 1% lower revenue of RM1.87bil, was attributed mainly to the absence of gain on sale of land at Senai Airport Free Industrial Zone and substantial completion of the SBK Line.

(MMC’s indirect subsidiary Senai Airport City Sdn Bhd entered into a deal to sell 188.743 acres in Johor for RM369.97mil in August 2015 and it estimated to gain RM153.52mil, to be paid in phases. As for the SBK Line, MMC’s jointly controlled entity MMC Gamuda KVMRT (T) Sdn Bhd had been awarded the underground works package for the project.)

MMC’s four divisions - ports and logistics; energy and utilities; engineering and construction; and investment holding, corporate and others - all reported weaker bottom-line results in the first half of the financial year.

Engineering and construction was the division that reported the biggest percentage and absolute value decline - 23% lower profit before zakat and taxation, or a drop of RM25mil to RM84.7mil.

On its prospects, MMC said the group remained positive of its prospects driven by stable performances of its operating companies together with contribution from on-going construction projects. 

It also expected the completion of its 49% purchase in Penang Port Sdn Bhd (PPSB) and the proposed acquisition of the remaining 51% equity interest to contribute positively to the group’s future earnings via full consolidation of PPSB as a wholly-owned subsidiary.
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