This article first appeared in The Edge Financial Daily on November 22, 2017

KUALA LUMPUR: Malaysian Resources Corp Bhd’s (MRCB) third-quarter (3Q) net profit dropped 4.4% to RM28.09 million or 1.28 sen per share, from RM29.39 million or 1.49 sen per share a year earlier, partly due to higher expenses.

The group’s financial statements for the quarter ended Sept 30, 2017 showed that its expenses doubled to RM1.06 billion from RM470.53 million previously.

Quarterly revenue more than doubled to RM1.13 billion from RM551.22 million and was mainly derived from its engineering, construction and environment division.

MRCB said the bulk of the division’s revenue was contributed by infrastructure projects, and the ongoing construction of property development projects, as well as several commercial buildings for clients in Johor, power transmission-related construction projects in Peninsular Malaysia, and other civil engineering projects in the Klang Valley.

MRCB said net profit for the cumulative nine months ended Sept 30, 2017 fell 21.9% to RM61.92 million from RM79.28 million a year earlier, though revenue climbed 75.5% to RM2.42 billion from RM1.38 billion.

The group attributed the encouraging growth in revenue to the engineering, construction and environment division, whose revenue jumped 236.7% to RM1.61 billion during the period. The division’s operating profit rose 365.7% to RM46.5 million, helped by an improvement in operating margins, which increased year-on-year to 2.9% from 2.1%.

The group said its property development and investment division recorded a 9.6% decrease in revenue to RM660.7 million in the January-September period, largely due to the completion of Sentral Residences in KL Sentral and Easton Burwood development in Melbourne, as well as new projects still being in the early phase of construction.

Shares in MRCB closed down 2.5 sen or 2.5% to 97.5 sen, with a market capitalisation of RM4.28 billion.