KUALA LUMPUR (Aug 24): MMC Corp Bhd's net profit slumped 66% to RM20.08 million in the second quarter ended June 30, 2018 (2QFY18), from RM59.81 million a year ago, due largely to lower contribution from Johor Port Bhd and Northport (Malaysia) Bhd.

The conglomerate also attributed the decline in earnings to the lower share of profit from its 36.5%-owned Malakoff Corp Bhd due to lower contribution from Segari Energy Venture Sdn Bhd's (SEV) plant, and lower fuel margin recorded at coal plants.

This was despite seeing a 27% year-on-year (y-o-y) rise in quarterly revenue to RM1.2 billion from RM944.43 million, due to work progress from the Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRT-SSP) Line, and the effect of consolidating Penang Port Sdn Bhd's (PPSB) revenue, its stock exchange filing showed.

For its cumulative six months ended June 30, 2018 (1HFY18), its net profit fell 47% y-o-y to RM61.42 million from RM115.94 million, though revenue grew 33% to RM2.48 billion from RM1.87 billion.

On prospects, MMC's ports and logistics division is estimated to record stable volume across all the ports, while the recent acquisition of the balance 51% interest in PPSB 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 Malacca," it said.

It also said its energy and utilities division is expected to continue to contribute positively to its earnings with input from the group's associated companies, Malakoff and Gas Malaysia Bhd.

Meanwhile, substantial existing orderbook provide earnings visibility for its engineering division, anchored by the KVMRT-SSP Line's underground work, and its project delivery partner (PDP) role for the elevated portion.

"Furthermore, the earnings contribution from engineering division will be sustained by ongoing projects, namely Langat 2 Water Treatment Plant, Langat Centralized Sewerage Treatment Project and our involvement in the PDP role for the Pan Borneo Sabah Highway," MMC added.

Shares of MMC closed four sen or 2.67% lower at RM1.46 today, valuing it at RM4.45 billion. Over the past year, the stock has fallen near 36% from RM2.26.