KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) posted pre-tax profit of RM8.4mil in the first quarter ended March 31, 2019 but expects the pace of recognition from the third light rail transit (LRT3) project joint venture to pick up.
MRCB's 50%-owned LRT3 project joint venture contributed profit after tax of only RM500,000 compared with RM9mil a year ago, it said on Thursday.
However, as work on this project has restarted, the pace of profit recognition from the project will increase. As at March 31, 2019, the engineering, construction and environment division’s external client order book stood at RM22.6bil.
MRCB said in Q1, the group revenue was RM234.10mil due to newer property development projects still being at the early stage of construction, when revenue and profit recognition is minimal, as well as the completion of several large property projects in 2018.
Pre-tax profit was further impacted by income from the LRT3 Project being deferred as a result of it being remodelled from a project-delivery-partner to a fixed price turnkey project.
MRCB said its property development and investment division recorded revenue of RM85.1mil and operating profit of RM3mil.
It explained the lower revenue and operating profits were due to the construction completion of two significant property projects, namely VIVO in 9 Seputeh and Kalista Park Homes in Bukit Rahman Putra, which resulted in revenue from sales in these two key projects no longer being progressively recognised.
Remaining development profits from these projects will be recognised in subsequent quarters upon completion of the sales and purchase agreement process.
MRCB said the division sold RM75mil worth of properties in Q1 and had total unbilled property sales of RM1.6bil as at March 31, 2019.
It added that its group’s investment holding in MQ REIT also continued to contribute a recurring income of RM5.7mil versus RM4.3mil a year ago.
MRCB's engineering, construction and environment division recorded revenue of RM132.7mil and operating profit of RM16.7mil.
“This was mainly contributed by its ongoing construction projects, namely the MRT Line 2 Package V210, Damansara-Shah Alam Elevated Highway Package CB2, TNB HQ Campus and Larkin Indoor Stadium,” it said.