KUALA LUMPUR (Aug 26): Malaysian Resources Corporation Bhd’s (MRCB) net profit fell 67% in the second quarter ended June 30, 2019 (2QFY19), as it recognised lower billings from its property development projects.  

The net profit fell to RM11.06 million from RM33.45 million in the same quarter last year, with earnings per share dropping to 0.25 sen from 0.76 sen, according to the group’s filing with Bursa Malaysia.

Quarterly revenue fell 41% to RM240.97 million, from RM405.25 million a year ago.

For the first half (1HFY19), net profit dropped 72% year on year to RM15.19 million from RM54.98 million, as revenue fell 43% to RM475.02 million from RM832.85 million.

In a statement, MRCB said the revenue and profits were impacted by the group’s newer property development projects still being at the early stage of construction, when revenue and profit recognition is minimal.

Income was also affected after the LRT3 project was deferred as a result of it being remodelled from a project delivery partner to a fixed price turnkey project, it added.

“Although we have unbilled property sales of RM1.8 billion, as a high-rise developer, our ability to book revenue and profits hinges on construction progress. 

"Although construction is progressing well at our Sentral Suites and Carnegie Development in Melbourne, these key projects will not begin contributing significantly to profits until next year, when we also expect the pace of revenue and profit recognition from the LRT3 project to increase,” said MRCB group managing director Imran Salim.

The group said its Engineering, Construction & Environment division currently has open tenders valued at RM1.57 billion, and is placing greater emphasis on seeking infrastructure projects.

As at June 30, the external client order book stood at RM22.6 billion, which is among the highest in the industry, MRCB said.

MRCB’s share price closed down 1.5 sen or 1.99% at 74 sen, for a market capitalisation of RM3.27 billion.