KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) recorded revenue of RM1.2bil and loss before tax of RM152.9mil in FY2020 due to the RM175.3mil in impairment provisions relating to completed construction projects impacted by the pandemic.
In a statement on Thursday, MRCB said without these impairments, it would have recorded a profit of RM22.4mil in 2020.
“Since the resumption of construction activities disrupted by the various movement restrictions, the group has seen continued improvements in its profitability, reflecting its ability to recognise more revenue as construction progress gained momentum, albeit at a slower pace compared to pre-pandemic levels, ” it said.
MRCB said this was reflected in the stronger performance in the second half of 2020, where it recorded revenue of RM606.5mil and profit before tax of RM42.2mil.
In the first half, MRCB recorded revenue of RM592.9mil and profit before tax, excluding the impairments, of RM7.3mil.
It said the property development & investment division recorded a 12% increase in revenue to RM635.1mil. This was largely due to revenue recognition from its 1060 Carnegie project in Melbourne, upon the financial settlement of purchased units.
“However, there have been delays in financial settlements and a slowdown in sales as Victoria State in Australia implemented much tougher movement restrictions and total lockdowns during the second half of 2020, ” it said.
Hence, the division recorded lower operating profit of RM46.7mil in 2020 compared to RM76.8mil in 2019.
The factors were mainly due to disruptions from various movement restrictions throughout the year, and their impact on construction progress billings.
“The 39% decline in operating profits was further amplified by a gain before tax of RM58.8mil from the disposal of the group’s entire 30% equity interest in One IFC Sdn Bhd recorded in 2019, ” it noted.
MRCB said the division sold RM187.3mil worth of properties and had unbilled property sales of RM1.1bil at the end of 2020.
As for the engineering, construction & environment division, it recorded revenue of RM514.9mil, which was largely contributed by the new EPF Headquarters at Kwasa Sentral, DASH Elevated Highway Package CB2, SUKE Elevated Expressway Package CA2 and MRT2 Package V210 projects.
The division also completed the RM68mil Larkin Indoor Stadium in Johor and the RM173mil PR1MA Kajang in 2020.
MRCB also said the group’s 50%-owned LRT3 project joint venture company contributed profit after tax of RM8.1mil compared with to RM600,000 in 2019.
“Due to the pandemic, the division performed a detailed business impact assessment on the recoverability of the carrying amounts of assets, and subsequently provided RM197.4mil for the impairment of contract assets, trade and other receivables it believes will be impacted by the pandemic in the second quarter of 2020.
“However, after some recoveries in the fourth quarter, the provision was reduced to RM170.2mil. This resulted in the division incurring an operating loss of RM174.3mil in 2020, compared to an operating profit of RM23.1mil in 2019, ” it said.