MRCB 2Q revenue almost doubles on stronger engineering and construction contribution

KUALA LUMPUR (Aug 29): Malaysian Resources Corp Bhd’s (MRCB) revenue almost doubled to RM756.52 million in its second quarter ended June 30, 2017 (2QFY17) from RM389.19 million a year ago, thanks mainly to improved engineering and construction contribution.

Its engineering, construction and environment revenue jumped 4.5 times to RM467.65 million from RM103.49 million. Topline from property development and investment also grew 9%.

Quarterly net profit, however, nearly halved year-on-year to RM23.37 million from RM45.5 million, as the year ago period had booked a disposal gain.

For the same reason, its six-month net profit ended June 30 (1HFY17) declined 32.18% y-o-y to RM33.83 million from RM49.89 million, even as revenue jumped 55% to RM1.28 billion from RM825.21 million.

Excluding the disposal gain of some RM44.4 million booked a year ago, MRCB said its pre-tax profit in 1HFY17 amounted to RM63.4 million, up 32% y-o-y, driven by lower finance cost, higher finance income, and more effective cost management of the group’s working capital.

Of the RM44.4 million disposal gain booked last year, RM41.6 million was from its disposal of Sooka Sentral, while the remaining RM2.8 million was due to the disposal of its entire 40% stake each in Ekovest-MRCB JV Sdn Bhd and Ekovest-MRCB Construction Sdn Bhd to Ekovest Bhd.

Commenting on the latest results, MRCB group managing director Tan Sri Mohamad Salim Fateh Din said the group’s strong half-year revenue growth was driven by a 110% rise in income from its ECE division.

At the same time, Mohamad Salim said MRCB’s property development and investment division also recorded a 29% increase in revenue, contributed by the Sentral Residences and its Eastern Burwood Development project in Melbourne, Australia.

“These are very pleasing results...With these two key property development projects completed now, and new projects still in the early phase of construction, revenues this year will continue to be dominated by our engineering, construction and environment division,” he added.

As at end-June, MRCB’s unbilled sales under its property development division stood at RM1.6 billion.

On prospects, MRCB believes it can maintain its operating profit throughout FY17, despite the difficult operating environment.

“Over the longer term, the division’s 383-acre urban land bank will provide the group with a sustainable pipeline of future revenues from property development projects centred around mass transporation infrastructure,” it said.

As for its ECE division, MRCB expects to continue to “actively tender” for more contracting projects to replenish its orderbook.

Currently, MRCB said its recent gain of RM409 million worth of new contracts win has boosted its external orderbook to RM6.3 billion.

MRCB shares slid 3 sen to RM1.17 as at 4.14pm today, for a market capitalisation of about RM2.59 billion. — theedgemarkets.com

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