KUALA LUMPUR (Aug 30): Malaysian Resources Corp Bhd’s (MRCB) net profit for its second quarter ended June 30, 2018 (2QFY18) jumped 39% year-on-year to RM33.45 million from RM24.05 million, despite sharply lower revenue, which the group says is due to much stronger performance from its engineering, construction and environment (ECE) division.

It also recorded no operating losses from cessation of the Eastern Dispersal Link's toll concession and the reclassification of the concession asset to reflect the tolled road's upcoming sale, its stock exchange filing today showed.

While revenue came in 44% lower during the quarter at RM405.25 million compared to RM725.27 million a year ago, on lower contribution in three major business segments (property development and investment, ECE, and infrastructure and concession), expenses fell 46% to RM362.31 million and finance costs went down 55% to RM16.76 million. 

In the first half of FY18 (1HFY18), MRCB's net profit jumped 68% to RM54.98 million from RM32.69 million a year ago, on largely the same reasons that boosted its 2QFY18 earnings, though revenue dropped 33% to RM832.85 million from RM1.25 billion.

The group said the significant y-o-y drop in cumulative revenue was because 1HFY17 had benefited from a one-time construction revenue derived from the redevelopment of the National Sports Complex completed in July 2017, as well as tolling revenue from the EDL toll road collection, which was discontinued on Jan 1 this year.

"In the first half of the financial year, the group's 50%-owned LRT 3 Project Delivery Partner joint venture company contributed RM15 million profit after tax, compared with RM3.7 million in the same period last year. Accordingly, the group's 27.89% equity-owned MQ REIT (MRCB Quill REIT) and associated company MRCB Quill Management Sdn Bhd, both contributed a total of RM9.5 million profit after tax to the group," the group said.

The sale of a piece of development land in 1HFY18 also contributed a profit before tax of RM31.3 million to its property development and investment division, it added.

Moving forward, the group remains confident of its long term prospects on the back of earnings to be recognised from several property and construction projects in the pipeline.

As at June 30, 2018, the group’s unbilled order book for the construction segment stood at RM5.1 billion. Whereas, the group’s unbilled property sales stands at RM1.67 billion.

MRCB shares closed down four sen or 5.41% to 70 sen today, with 20.61 million shares traded, for a market value of RM3.07 billion.