This article first appeared in The Edge Financial Daily on November 23, 2018

KUALA LUMPUR: Malaysian Resources Corp Bhd’s (MRCB) earnings were down a third in its third quarter ended Sept 30, 2018 (3QFY18) due to the absence of two major revenue contributors, namely the KL Sports City refurbishment project in Bukit Jalil and toll collection revenue from the Eastern Dispersal Link.

The group posted a 35% decline in net profit for 3QFY18 to RM19.79 million from RM30.58 million a year ago as revenue almost halved to RM663.75 million compared with RM1.13 billion recorded in the previous year’s corresponding quarter.

Earnings per share shrank to 0.45 sen from 1.39 sen, according to the group’s filing with Bursa Malaysia yesterday.

Meanwhile, profit before tax had also been affected by the remodelling of the light rail transit Line 3 (LRT3) project to a fixed price contract, resulting in a retiming of income recognition, the group added in a statement yesterday.

For the nine months ended Sept 30, 2019, MRCB posted an 18.2% increase in net profit to RM74.77 million, mainly due to significantly higher margins in its engineering, construction and environment (ECE) division.

“The division’s revenue was mainly contributed by the mass rapid transit Line 2 V210 Package project, the rehabilitation project at Sungai Pahang, as well as several commercial buildings for clients in Johor,” MRCB said.

This was despite a nearly 37% drop in the group’s total revenue over the period to RM1.5 billion from RM2.37 billion in the previous year.

The group’s ECE division currently has an external order book of RM5.9 billion with an unbilled portion of RM4.8 billion, MRCB said.

“The external order book is expected to increase further by approximately RM17 billion once the LRT3 contract is finalised and the Bukit Jalil privatisation exercise is completed.

“The division continues to actively tender for more contracting projects to replenish its order book [with] current open tenders valued at RM2.7 billion,” MRCB said.

Meanwhile, its property development and investment arm has total cumulative unbilled sales which are expected to deliver RM1.63 billion in revenue over the lifespan of its projects.

Shares in MRCB declined 0.5 sen or 0.68% to 73 sen yesterday, giving the group an RM3.21 billion market value.