KUALA LUMPUR: MEGA FIRST CORPORATION BHD reported first quarter net profit of RM57.40mil, boosted by energy sales revenue from the Don Sahong project which was completed in early of the fourth quarter last year.
Mega First said on Thursday the net profit increased by 70.5% from RM33.65mil a year ago. Its revenue however fell by 27.5% to RM160.68mil from RM221.84mil. Earnings per share were 13.49 sen compared with 8.48 sen.
It said the lower revenue was mainly due to the absence of construction revenue (1Q2019: RM169.9mil), mitigated by RM103.3mil energy sales revenue (1Q2019: Nil), and higher contributions from the resources division and the packaging & labels division.
However, pre-tax profit rose by 47.9% to RM66.5mil from RM44.9mil, bolstered by profit from energy sales amounting to RM64.7mil (1Q2019: Nil) and higher profit contribution from both the resources and packaging & labels divisions, which collectively more than offset the absence of construction profit in the current quarter (1Q2019: RM45.6mil).
The profit after tax grew at a faster pace of 72.5% when compared to growth in pre-tax profit due to lower effective tax rate.
It said income from energy sale in Laos is exempted from income tax for five years whereas a 20% deferred tax provision was made on construction profits in the same quarter last year.
Mega First said the Don Sahong plant went into full commercial operation on Jan 7 following successful testing of and synchronisation with Électricité du Laos’s (EDL) new 500KV transmission line to Cambodia.
It said the revenue of RM103.3mil in 1Q was the energy billing to EDL for the quarter. The average energy availability factor for the period was 70.7%, slightly ahead of management expectations.
“Seasonally, the energy availability factor in the current quarter is expected to be the lowest for the year as a result of the dry season in Laos which typically stretches from January to May. The energy availability factor is forecast to improve as the wet season sets from June to December, ” it said.
The power division posted earnings before interest, tax, depreciation and amortisation (Ebitda) of RM90.9mil and a pre-tax profit of RM64.7mil, representing Ebiotda and pre-tax margin of 88.1% and 62.6% respectively.
As for resource division, it said revenue rose by 5% to RM34.5mil mainly due to a 6.5% increase in sales of lime products to RM31.6mil.
Pre-tax profit rose by 25.7% to RM4.3mil from RM3.4mil a year ago on higher sales volume, increased plant utilisation and lower fuel costs.
As for the packaging & labels division, its plant in Melaka, revenue rose by 29.3% to RM19.2mil.
The plant makes paper bags, flexible packaging products and labels & stickers for various industries including food and beverages and fast-moving consumer goods. The higher revenue was mainly due to increased sales of paper bags, as well as increase demand for flexible packaging products from new customer.
It made a pre-tax profit of RM500,000 compared to a loss of RM500,000 a year ago.
Mega First said when compared with the fourth quarter ended Dec 31,2019, the group turnover fell 17.8% quarter-on-quarter from RM195.5mil to RM160.7mil.
The lower revenue was due to the absence of construction revenue (4Q2019: RM104.2mil).
However, the impact from the absence of construction revenue was however partially offset by a RM68.2 million increase in energy sales to EDL from RM35.1mil in 4Q2019 to RM103.3mil.
Mega First said 1Q pre-tax profit fell by 29.6% to RM66.5mil (4Q2019: RM94.5mil).
It said the decline in pre-tax profit was due to the absence of construction profit (4Q2019: RM68.6mil), partially offset by a RM36.2mil increase in pre-tax income from energy sales to EDL.
This increased from RM28.5mil in 4Q2019 to RM64.7mil in the current quarter.
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