KUALA LUMPUR (Nov 27): MMC Corp Bhd's net profit doubled to RM38.94 million in the third quarter ended Sept 30, 2018 (3QFY18) from RM18.94 million a year ago, on absence of impairment provision of RM98 million on the Storm Water Management and Road Tunnel (SMART) project, as a result of lower projected traffic volume.

It also recognised a negative goodwill of RM51.7 million arising from the acquisition of the remaining 51% stake in Penang Port Sdn Bhd (PPSB).

This resulted in a higher earnings per share of 1.3 sen for 3QFY18, compared with 0.6 sen for 3QFY17.

However, revenue was down 10.6% to RM944.08 million from RM1.06 billion a year ago, due to lower work progress from the Klang Valley Mass Rapid Transit (KVMRT) Sungai Buloh-Serdang-Putrajaya (SSP) Line, lower contribution from Rapid material offloading facilities operations at Johor Port and lower container volume handled at Northport.

These were cushioned by work progress at the Langat sewerage treatment project, higher volume handled at Pelabuhan Tanjung Pelepas in Johor, as well as effect from consolidation of PPSB’s revenue. 

For the cumulative nine months (9MFY18), the group's net profit fell 25.6% to RM100.37 million from RM134.87 million a year ago, even though revenue increased 17.1% to RM3.42 billion from RM2.93 billion in 9MFY17.
 
On prospects, MMC group managing director Datuk Seri Che Khalib Mohamad Noh said it is optimistic of its performance and will continue to improve its operations, intensify its cost optimisation efforts and explore new business opportunities.

MMC said the ports and logistics division is estimated to record stable volume across all the ports. Further, the recent completion of the acquisition of a 51% stake in PPSB in May is expected to contribute positively to the division’s earnings.

"The acquisition allows the group to establish a strong foothold in the northern region of Peninsular Malaysia and complement the group’s strategic presence throughout the Straits of Melaka.

"Operational and cost synergies driven by MMC would further improve the performance of its ports and logistics division. The energy and utilities division is expected to contribute positively from the group’s associated companies, namely Malakoff Corp Bhd and Gas Malaysia Bhd," it added.

MMC noted substantial existing order-book provides earnings visibility for the engineering division, anchored by the KVMRT-SSP Line underground works and its elevated portion.

Furthermore, MCC said earnings contribution from its engineering division will be sustained by ongoing projects, namely Langat 2 Water Treatment Plant, Langat Centralised Sewerage Treatment Project and its involvement in the project delivery partner role for the Pan Borneo Sabah Highway.

MMC shares closed down 3.5 sen or 3.4% at 99.5 sen today, with 891,600 shares done, bringing a market capitalisation of RM3.03 billion.