MMC Corporation Berhad (MMC or the Group), a premier utilities and infrastructure group recorded a higher Profit Before Zakat and Taxation (PBZT) of RM132 million for the quarter ended 30 June 2019, a more than three-fold jump from the corresponding quarter ended 30 June 2018.
It’s mainly due to higher contribution from Pelabuhan Tanjung Pelepas (PTP), lower operating cost at Johor Port Berhad (Johor Port) and Northport Malaysia Berhad (Northport) as well as gain on disposal of an asset held for sale and lower administrative cost across the Group.
These were offset by higher finance cost and depreciation due to the adoption of Malaysian Financial Reporting Standards (MFRS) 16 “Leases”.
The Group recorded higher revenue of RM1.23 billion, an increase of 2.4% compared to RM1.20 billion reported in the corresponding quarter ended 30 June 2018 due to higher volume handled at PTP and effect from consolidation of Penang Port Sdn Bhd’s (Penang Port) revenue. However, these were offset with lower progress from Langat Sewerage project.
For the financial period ended 30 June 2019, the Group recorded a higher PBZT of RM220 million compared to RM104 million due to higher contributions from port entities, gain on disposal of an asset held for sale and lower administrative costs.
These were offset by lower contribution from Klang Valley Mass Rapid Transit Sungai Buloh – Serdang – Putrajaya Line (KVMRT-SSP Line) and Langat Sewerage project as well as higher finance cost and depreciation due to the adoption of the MFRS 16 “Leases’.
The Group recorded RM2.37 billion in revenue from RM2.48 billion reported in the corresponding period of the preceding financial year due to lower contribution from KVMRT-SSP Line following revision of contract in November 2018 as well as lower progress from Langat Sewerage project.
These were moderated by consolidation of Penang Port revenue and higher volume handled at PTP.
The Ports & Logistics division recorded revenue of RM1.58 billion, a 13.4% growth compared to RM1.39 billion in the corresponding period of the preceding financial year mainly due to effect from full consolidation of Penang Port’s revenue and higher volume handled at PTP.
The segment recorded higher PBZT by RM86 million to RM222 million compared with RM137 million reported in the corresponding period of the preceding financial year due to higher volume handled at PTP, lower operating cost at Johor Port and Northport, higher share of results from Red Sea Gateway Terminal as well as full consolidation of Penang Port’s result.
These were offset by higher finance cost and depreciation due to the adoption of MFRS 16 “Leases”. The Engineering division recorded revenue of RM740 million compared to RM1.04 billion reported in the corresponding period of the preceding financial year mainly due to lower contribution from KVMRT-SSP Line following revision of contract in November 2018 as well as lower progress from Langat Sewerage project.
The division recorded a decrease of 21.8% in PBZT to RM119 million from RM152 million reported in the corresponding period of the preceding financial year due to lower contribution from KVMRT-SSP Line and Langat Sewerage project.
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 Corporation Berhad and Gas Malaysia Berhad.
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 on-going projects including Langat 2 Water Treatment Plant and Langat Centralised Sewerage Treatment Project.
Dato’ Sri Che Khalib Mohamad Noh, Group Managing Director of MMC Corporation Berhad said, “We will keep on strengthening our capabilities and service delivery with a focus on operating performance and efficiency whilst exploring new opportunities.”
