KUALA LUMPUR (Feb 24): YTL Corp Bhd’s net profit fell 14% to RM126.09 million or 1.2 sen per share for the second quarter ended Dec 31, 2017 (2QFY18) from RM147.69 million or 1.42 sen per share in 2QFY17.

Revenue for the quarter increased 7% to RM3.89 billion from RM3.62 billion in the previous corresponding quarter.

According to its filing with Bursa Malaysia, the decline in performance was due to lower profit contribution from the construction, cement manufacturing, hotels and utilities segments.

The construction segment reported lower revenue and pre-tax profit due to lower site progress recorded, while the cement manufacturing and trading division saw lower profit contribution due to increase in production costs and competitive pricing in the domestic market.

The hotel business saw increased revenue, contributed by The Hotel Stripes in Kuala Lumpur, Sydney Harbour Marriott Hotel in Australia and three newly acquired hotels in the UK, but unrealised foreign exchange loss had resulted in lower pre-tax profit.

Meanwhile, the utilities division was affected by lower margins for electricity sales and oil tank leasing, as well as higher finance costs by the multi-utilities business division.

YTL Corp’s business divisions that posted profit growth during the quarter were the information technology and e-commerce division and the property investment division.

The management services division reported lower pre-tax loss, amid an increase in the profit of YTL Power International Bhd’s associated companies.

For the six months to Dec 31, net profit fell 10% to RM268.99 million from RM298.02 million in the same period a year earlier, while revenue climbed 10% to RM7.83 billion from RM7.11 billion.

Going forward, YTL Corp expects the construction segment to post satisfactory performance, as its construction contracts relate mainly to the group’s property development and infrastructure works.

Performance of the information technology segment is also expected to be satisfactory, as a significant portion of its revenue is derived from the resilient spectrum sharing fee income.

Meanwhile, the cement manufacturing and trading business is expected to continue to see tough competition.

For the utilities segment, the group highlighted that YTL Power Generation Sdn Bhd (YTLPG) had commenced operations on Sept 1, 2017, for the supply of 585 megawatt of capacity from the Paka facility for a contractual period of three years and 10 months, expiring on June 30, 2021.

“YTLPG is expected to perform satisfactorily as it operates under a regulatory regime,” it said.

The group said the electricity market in Singapore will remain competitive due to volatility in global markets and generation capacity oversupply in the wholesale electricity market.

“Despite the current challenges, this segment will continue to focus on customer service, diversification beyond the core business into integrated multi-utilities supply and non-regulated ancillary businesses in steam sales, oil storage tank leasing, bunkering services and potable water assets,” it said.

YTL Corp's share price rose 1 sen or 0.68% to close at RM1.48 yesterday, giving it a market capitalisation of RM15.9 billion. — theedgemarkets.com

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