MMC Corp 2Q net profit jumps threefold on strong performance, disposal gain

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KUALA LUMPUR (Aug 27): MMC Corp Bhd’s net profit rose by more than threefolds to RM67.23 million in its second quarter ended June 30, 2019, from RM20.08 million in the corresponding quarter last year,

Revenue rose 2.5% to RM1.23 billion from RM1.2 billion in the year-ago quarter, due to higher volume handled at Pelabuhan Tanjung Pelepas (PTP) and with the consolidation of Penang Port Sdn Bhd’s revenue, the group said in an exchange filing.

MMC attributed the jump in its profit to the higher contribution of PTP, lower operating cost at Johor Port Bhd and Northport Malaysia Bhd, as well as a gain on disposal of an asset held for sale besides lower administrative cost across the group.

The group said its profit would have been higher if not for the finance cost and depreciation due to the adoption of the Malaysian Financial Reporting Standard 16 (MFRS 16) Leases.

MMC’s strong 2Q earnings helped lift its first-half net profit to RM120.74 million, nearby double from RM61.42 million in the same period last year.

Cumulative revenue, however, stood 4.3% lower at RM2.37 billion, versus RM2.48 billion in the year-ago period, due to lower contribution from Klang Valley Mass Rapit Transit (KVMRT) Sungai Buloh-Serdang-Putrajaya (SSP) Line following revision of contract in November 2018 as well as lower progress from Langat Sewerage project.

Going forward, MMC expects to strengthen its capabilities with a focus on operating performance and efficiency whilst exploring new opportunities.

“Continuous investments into the ports’ infrastructure, capacities and capabilities along with execution of operational plans are expected to deliver positive results.

“Operational and cost synergies driven by MMC would further improve the performance of its ports & logistics division.

“The energy & utilities division is expected to contribute positively from the group’s associated companies, namely Malakoff Corp Bhd and Gas Malaysia Bhd.

“Substantial existing order-book provides earnings visibility for the Engineering division anchored by the KVMRT-SSP Line. Furthermore, the earnings contribution from the engineering division will be sustained by ongoing projects including Langat 2 Water Treatment Plant and Langat Centralized Sewerage Treatment Project,” it added.

Shares in MMC closed unchanged at RM1.08 today, for a market capitalisation of RM3.29 billion. The stock is up 35% since its low of 79.4 sen on Feb 7.