This article first appeared in The Edge Financial Daily on November 23, 2017

KUALA LUMPUR: YTL Corp Bhd’s net profit slipped 5% to RM142.9 million in the first quarter ended Sept 30, 2017 (1QFY18) from RM150.33 million a year ago, as it paid more tax and booked higher sales and finance costs.

Taxation for the quarter rose 57% year-on-year (y-o-y) to RM130.53 million from RM83.15 million. Cost of sales grew 11% y-o-y to RM2.79 billion from RM2.51 billion, while finance costs rose 37% y-o-y to RM419.92 million from RM306.62 million, its income statement filed with Bursa Malaysia showed.

Other operating income, which fell to RM57.31 million from RM65.83 million y-o-y, also weighed on its performance.

Quarterly revenue, however, grew 13% y-o-y to RM3.93 billion from RM3.49 billion, on higher contribution from all business segments.

In particular, its utilities business — which contributed 63.7% of its revenue and 51.9% of its profit before tax (PBT) — saw a 9% y-o-y rise in revenue to RM2.5 billion, while PBT rose 13% y-o-y to RM228.54 million.

Its cement manufacturing and trading business recorded a 11% y-o-y rise in top line to RM637.74 million, but PBT fell 41% y-o-y to RM44.49 million, mainly due to higher production cost and the absence of liquidated damages imposed on the contractor for a delay in constructing a cement facility.

Its property investment and development revenue rose 40% y-o-y to RM374.31 million, while PBT jumped 396% y-o-y to RM190.42 million, largely due to land sale to the government for the mass rail transit project.

Moving forward, the group said the electricity market in Singapore, under its utilities segment, will remain competitive. It also updated that YTL Power Generation Sdn Bhd has started supplying power on Nov 1 from its facility in Paka, Terengganu, for the next three years and 10 months. The unit is expected to perform satisfactorily.

As for its 45%-owned Attarat Power Company, which is developing a 554mw oil shale-fired power generation project in Jordan and has inked a 30-year power purchase deal with the state-owned utility company, it said construction work for the project has begun, with operations to start in mid-2020.

On its still highly competitive cement industry, a satisfactory performance is expected for FY18. It is likewise for its property investment and development segment.