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MRCB 2QFY21 net loss narrows year-on-year due to absence of asset impairment

KUALA LUMPUR (Aug 30): Malaysian Resources Corp Bhd's (MRCB) net loss narrowed to RM32.42 million in the second quarter ended June 30, 2021 (2QFY21) against RM220.9 million in the previous corresponding quarter last year.

Quarterly revenue grew 35% to RM225.75 million from RM167.18 million a year ago.

The improved earnings were attributed to the RM197.4 million provision made for the impairment of contract assets, trades and other receivables it incurred a year ago as a result of the Covid-19 pandemic.

To compare on a quarterly basis, the group posted a net profit of RM5.2 million in the immediate preceding quarter. The group attributed the net loss to site closures due to Movement Control Order (MCO) restrictions.

Quarterly revenue was nearly flat at RM225.75 million against RM226.71 million in the preceding quarter, its bourse filing showed.

Meanwhile, for the first half of the financial year 2021 (1HFY21), the group's cumulative net loss shrank to RM27.21 million against RM204.81 million in the same period a year prior.

The narrowing of cumulative net loss in 1HFY21 was due to the aforementioned impairment of contract assets, trades and other receivables incurred in 1HFY20.

Cumulative revenue dropped nearly 24% to RM452.46 million from RM592.94 million last year, largely attributed to MCO 3.0 and Full Movement Control Order lockdowns and other restrictions, resulting in site closures in May and June 2021.

"This impacted construction progress that was already limited by ongoing Covid-19 restrictions, effectively making April 2021 the only production month for the group's project sites in 2QFY21.

"Productivity overall was also impacted by disruptions in the building materials supply chain due to lockdowns, as well as an ongoing shortage of workers," MRCB added.

In terms of prospects, the group noted that the outlook for the economy and property market will remain challenging for the foreseeable future.

"This concern is further reinforced with the continued increase of Covid-19 infections experienced in Malaysia, and the Klang Valley in particular where most of the company's ongoing developments are located, and where a Movement Control Order continues to be imposed.

"Nevertheless, construction of the property development and investment division's key ongoing property developments continues to progress during this MCO, albeit at significantly lower productivity levels."

MRCB's share price fell 0.5 sen to close at 39.5 sen, valuing the group at RM1.76 billion.

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