KUALA LUMPUR (Nov 17): YTL Corp Bhd's net profit dropped 25% to RM150.33 million or 1.44 sen for the first quarter ended Sept 30, 2016 (1QFY17) from RM202.62 million or 1.94 sen per share a year earlier, as it saw lower profit contribution from all but two of its seven business segments.

Its revenue narrowed 21% to RM3.49 billion from RM4.45 billion in the previous year, its bourse filing today showed.

The group said its business divisions saw lower profit, with the exception of its construction and hotels divisions, which saw 16.7% and 117.8% improvement in pretax profit, respectively.

Profit from its information technology and e-commerce business was impacted by lower income from software sales, while the cement manufacturing and trading business was hit by competitive pricing and lower sales volume.

Its property investment and development division saw a 6% decline in pretax profit due to lower unrealised foreign exchange gains, as the Singapore dollar weakened against the ringgit during the quarter.

Meanwhile, its utilities division was affected by the completion of the power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB) on Sept 30, 2015, lower fuel oil price in the multi utilities division, and the strengthening of the ringgit against the British pound.

Going forward, the group said its construction division is expected to post "satisfactory performance" for FY17, supported by YTL's property development and infrastructure works.

The growth in the local construction sector is also expected to bode well for its cement manufacturing and trading division.

As for its utilities division, the group said the power plants being developed by PT Tanjung Jati Power Company and Attarat Power Co — in which YTL owns 80% and 45% respectively — are currently in the development stage and are moving toward achieving financial close.

Meanwhile, YTL highlighted that the Energy Commission has awarded YTL the project for the supply of 585MW of electricity capacity from its existing facility in Paka between March 1, 2016, and Dec 31, 2018. The award was secured by its unit YTL Power Generation Sdn Bhd.

However, it has yet to sign the PPA with TNB, as the latter had included a condition for a new land lease to be entered into for the term of the new PPA.

"The Energy Commission subsequently issued a directive to TNB under the Electricity Supply Act 1990 to remove this condition as the existing land lease for Paka will only expire on Dec 30, 2018.

"On July 4, 2016, TNB applied to the High Court for leave to commence proceedings for a judicial review to, inter alia, quash the directive. The proceedings are pending before the High Court," said YTL.

As for its Singapore operations, the group said the electricity market in the country remained competitive amid global markets' volatilities but said it will continue to focus on customer service and the diversification of its core business.

YTL rose 1 sen or 0.65% to close at RM1.55 today, giving it a market capitalisation of RM16.21 billion.