MRCB remains bullish on outlook for 2016

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB), which saw net profit for the first quarter ended March 31, 2016 plunge 98% year-on-year in the absence of one-off gains, is confident that the group’s construction and property businesses will be able to sustain its earnings for 2016.
“We’re still bullish on our outlook. For 2016, we’re planning to launch RM2.2 billion worth of projects and out of the RM3.2 billion that we launched last year, we’ve unbilled sales of RM1.4 billion,” executive director Imran Salim told a press conference here yesterday, adding that the group is committed to paring down its debts.
MRCB’s net profit plunged 98% for the first quarter ended March 31, 2016, in the absence of one-off gains of RM239.5 million the group recognised on the disposal of Platinum Sentral and other assets for the same period in 2015.
The group made a net profit of RM4.4 million for the quarter, compared with RM237.9 million for the same period in 2015. This was despite revenue going up by almost 8% to RM436 million, compared with RM404.2 million.
Given the slowdown in the property market, Imran said, the group will launch property projects that can suit market needs in a bid to achieve a higher sales target of RM1 billion for 2016 against RM850 million in 2015.
For the construction segment, MRCB’s outstanding order book stands at RM5 billion.
“We’re very aggressive in tendering for more jobs with a tender book of RM8 billion, we want to be the key player in the industry,” Imran said.
MRCB’s net profit more than doubled to RM330 million in 2015 compared with RM153 million in 2014, partly due to the sale of Platinum Sentral and its joint venture companies.
As at end-April, MRCB’s net gearing stood at 1.12 times, a significant improvement compared with 1.75 times in 2013.
“We’re working on a few key initiatives to reduce the gearing further, I can’t set the target for gearing because I don’t know when the transaction will suffice,” Imran said.
About 36% of MRCB’s debts is related to its Eastern Dispersal Link (EDL) Expressway in Johor Baru.
On this, Imran acknowledged that the group is no longer keen on the highway asset as the focus is purely on the construction and property divisions. “We’re exploring many options whether it is total disposal or bring in equity partner, I can’t give you a firm answer which direction we’re going,” he said.
Under MRCB’s degearing plan, he said, the group will pursue more land fund structuring such as the recent deal with the Employees Provident Fund.
Asked about MRCB’s planned asset injection into its 31%-owned Quill Capital Trust, Imran said the next would be Menara Celcom which is located within the PJ Sentral Garden City, but noted that it takes two to three years for yield accretion. “We’ve another six more buildings (for injections) in the pipeline over a time span,” he added.