MRCB posts lower 1Q profit on completion of DASH highway project

• The lower contribution from the engineering, construction and environment division was partially offset by the property development and investment division, which recorded an operating profit of RM33.32 million for the quarter, up 58% from RM21.06 million for 1QFY2022.

KUALA LUMPUR (May 30): Property and infrastructure company Malaysian Resources Corp Bhd’s (MRCB) recorded a net profit of RM8.47 million for the first quarter ended March 31, 2023 (1QFY2023), a decline of 40% year-on-year from RM14.03 million, mainly due to the completion of Package CB2 of the Damansara-Shah Alam Elevated Expressway (DASH) project last year.

As a result, earnings per share for 1QFY2023 came in lower at 0.19 sen, compared with 0.31 sen a year earlier.

Revenue for the quarter also fell 8% to RM742.24 million, from RM810.71 million previously.

In a bourse filing on Monday (May 29), MRCB said segment-wise, its engineering, construction and environment division saw an operating profit of RM7.22 million for 1QFY2023, down 72% from RM25.68 million a year ago.

The lower contribution from the engineering, construction and environment division was partially offset by the property development and investment division, which recorded an operating profit of RM33.32 million for the quarter, up 58% from RM21.06 million for 1QFY2022.

The group attributed the higher contribution from the property development and investment division to the completion of the Sentral Suites development project in March, and where vacant possession of the completed units commenced in stages from April.

MRCB’s 27.94%-owned Sentral REIT and associated company Sentral REIT Management Sdn Bhd contributed a net profit of RM2 million to the group, down by RM1.9 million from the previous year.

The group derives the bulk of its earnings from its engineering, construction and environment division, as well as the property development and investment division.

MRCB said that it will continue to actively tender for more large infrastructure contracting projects for its engineering, construction and environment division going forward in order to replenish its order book.

However, it added that very few new large infrastructure construction projects are being put out to tender. The division’s open tender currently stands at RM30 billion.

As at March 31, 2023, MRCB's external client order book stood at RM26.4 billion, with the unbilled portion amounting to RM17 billion.

“This long-term order book will ensure that the division has a steady pipeline of construction contracts to sustain its business over the very long term, including the LRT3 project, which is due to be completed in 2024, and has achieved physical construction progress of 84%,” it said.

As for the property development and investment division, it had interests in 1,153 acres (466.6 hectares) of land with a gross development value of RM33 billion, and cumulative unbilled sales of RM220.3 million as at March 31, 2023.

MRCB said that its immediate priority moving forward is to enhance its cash flow by monetising its inventory of unsold complete stock, amounting to RM379 million as at March 31, 2023.

“[We] look forward to improved sales from foreign buyers with the opening of borders, particularly for our Sentral Suites, Vivo 9 Seputeh developments and St Regis residential units,” said the group.