MMC Corp 3Q net profit falls 22.4% to RM104.75 mil

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KUALA LUMPUR (Nov 26): MMC Corp Bhd's net profit for its third quarter ended Sept 30, 2014 (3QFY14) fell 22.4% to RM104.75 million from RM135.02 million a year ago, due to fair value (FV) adjustment in cash flow hedge, currency translation differences and FV losses in available-for-sale financial assets.

Fair value adjustment in cash flow hedge was at RM31.32 million, while currency translation differences and FV losses in available-for-sale financial assets was at RM20.89 million and RM7.35 million, respectively.

Revenue for 3QFY14 fell to RM1.73 billion, an 11.4% drop from the previous corresponding quarter, its filing to Bursa Malaysia today showed.

For the nine months ended Sept 30, 2014 (9MFY14), its net profit stood at RM293.78 million, 56.5% higher from RM187.70 million a year ago. Revenue was up 15.4% at RM6.46 billion, from RM5.6 billion in 9MFY13.

MMC Corp said the increase in 9MFY14 revenue was mainly due to higher work progress at the Klang Valley Mass Rapid Transit Sungai Buloh-Kajang Line (KVMRT-SBK) project, higher contribution from Malakoff in the Energy & Utilities segment, and the completion of sale of a parcel of land within the Senai Airport City development.

Profit before zakat and taxation in 9MFY14 was up 58.2% to RM537.8 million from RM340.0 million in the corresponding period, primarily due to higher contribution from Malakoff, in line with Tanjung Bin power plant's "positive recovery progress" and fair value gains from the acquisition of the remaining 75% shareholding in Port Dickson Power Bhd (PDP), which amounted to RM59.1 million.

There was also higher contribution from KVMRT-SBK project in line with higher work progress as the project enters its third year of construction.

The group is positive on its current prospects, as it foresees stable earnings contribution from its operating companies and on-going projects.

It expects its engineering and construction division to contribute positively on the back of a strong order-book.

"The KVMRT SBK Line Project is progressing well and is on track to be fully completed by July 2017.

"Furthermore, the group has during the year secured a few major projects namely Langat 2 Water Treatment Plant, Langat Centralised Sewerage Project, infrastructure works for the RAPID Pengerang co-generation plant, and the appointment as Project Delivery partner for the implementation of the KVMRT SSP Line Project," it said.

It added that industrial growth in Johor is expected to grow and will drive higher local cargo throughput, emanating from the various industrial projects that are currently in development stage.

"[The] ports and logistics division is expected to contribute positively on the back of healthy domestic and global economies," it said, adding that it expects overall performance to improve the earnings and increase the net assets of MMC.

MMC Corp closed 3 sen or 1.26% lower at RM2.35 today, giving it a market capitalisation of RM7.16 billion.