Mudajaya sees second consecutive quarter of net loss in 3Q

KUALA LUMPUR (Nov 29): Mudajaya Group Bhd reported its second consecutive quarter in the red, with a net loss of RM67.59 million for the third quarter ended Sept 30, 2016 (3QFY16) compared to a net profit of RM14.34 million recorded in the same quarter a year earlier.

Meanwhile, its quarterly revenue jumped 58% year-on-year to RM170.49 million from RM108.15 million.

The group said in a filing to Bursa Malaysia that its net loss was exacerbated by equity accounting of associate losses from RKM Powergen Pvt Ltd as well as impairment of assets provided for in the preceding quarter (2QFY16) under its power segment.

"The sharp increase in loss before tax was primarily due to equity accounting of losses from RKM, an associate which undertakes the 4x360MW IPP (independent power plant) in Chhattisgarh, India, as well as impairment of the Philippines wind farm related investment made in 2QFY16.

"In RKM, as disclosed previously, Units I & II of the IPP had achieved commercial operation date (COD).

"Consequently, depreciation on Units I & II had to be imputed and charged to profit or loss, while the interest costs previously capitalised during construction could no longer be capitalised after COD and hence were also charged to profit or loss accordingly," explained Mudajaya.

The group's construction segment and property development segment also saw higher losses for the quarter.

For the nine months to Sept 30 (9MFY16), net profit soared 682% to RM137.6 million from RM17.6 million, while cumulative revenue rose 37% to RM518.95 million from RM378.94 million.

Going forward, the group said it is well positioned to benefit from the various mega-infrastructure projects to be launched, including LRT Line 3, new power plants, highways and infrastructure projects.

Meanwhile, its 26% stake in RKM poses a very challenging prospect, it said, with the group to continue in its efforts to ensure all four units of the IPP development come on stream despite Mudajaya's limited control and influence.

"In terms of new investments, the group will continue to pursue opportunities both locally and overseas to build up its assets with recurring income streams to cushion against the cyclical nature of the construction business.

"It will also expand on its precast concrete manufacturing businesses to capitalise on the increasing demand from various mega-infrastruture projects," it said.

Mudajaya closed up 1.5 sen or 1.86% at 82 sen, for a market capitalisation of RM441.49 million. — theedgemarkets.com