MMC 4Q net profit surges 59.8% on contribution from Penang Port, MRT works

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KUALA LUMPUR (Feb 27): MMC Corp Bhd’s net profit surged 59.8% to RM119.72 million or 3.9 sen per share for the fourth quarter ended December 31, 2018 from RM74.91 million or 2.5 sen per share in the previous year’s corresponding quarter.

In its filing with the bourse, the group attributed the improved performance to the full consolidation of Penang Port Sdn Bhd’s results, higher contribution from the Sungai Buloh-Serdang-Putrajaya Mass Rapid Transit (MRT 2) Line, no share of losses from Zelan Bhd and higher share of profit from Malakoff Corp Bhd.

Malakoff, in which MMC holds a 37.6% stake, saw better contribution at its coal plants, lower depreciation, lower maintenance and finance costs, as well as higher contribution from associates.

Revenue for the quarter jumped 28% to RM1.59 billion from RM1.23 billion a year earlier.

For the full year, net profit increased 4.9% to RM220.08 million from RM209.79 million in the previous year, while revenue rose 20% to RM5.01 billion from RM4.16 billion.

Segmentally, all four of the group’s business segments — ports & logistics, energy & utilities, engineering and investment holding — posted higher revenue for the year.

However, profit contribution from ports & logistics and energy & utilities segments were lower year-on-year, while the investment holding segment saw higher loss before tax for the year.

Only the engineering segment saw an increase in profit contribution due to works progress for the MRT 2 Line and the absence of a one-off provision for impairment in the  Storm Water Management and Road Tunnel (SMART) project which was recorded in the previous year.

Going forward, the group said its ports & logistics division is expected to see positive volume growth across all its ports.

“The completion of the acquisition of the balance 51% interest in Penang Port in May 2018 will reflect its full year contribution to the division’s financial performance. The acquisition allows the group to establish a strong foothold in the Northern region of Peninsular Malaysia and complement the group’s strategic presence throughout the Straits of Malacca,” it said.

Meanwhile, the energy & utilities division is expected to contribute positively, driven by the performance of its associate companies Malakoff and Gas Malaysia Bhd.

MMC said its substantial order book for the engineering division provides earnings visibility, anchored by the MRT 2 Line underground and elevated works and supported by ongoing projects including Langat 2 Water Treatment Plant and Langat Centralised Sewerage Treatment project.

“MMC will continue to improve its operational efforts throughout the group and remain steadfast in pursuing our growth strategies to ensure the long-term sustainability and progress of the company,” said MMC group managing director Datuk Seri Che Khalib Mohamad Noh in a statement.

MMC’s share price rose 11 sen or 10.68% to RM1.14, giving it a market capitalisation of RM3.47 billion.