MMC Corp upbeat on outlook despite lower Q2 earnings

PETALING JAYA: MMC Corp Bhd’s net profit declined 49.7% to RM62.92 million for the second quarter ended June 30, 2017 compared with RM125.02 million in the previous corresponding period, mainly on the absence of gain on land sale, substantial completion of MRT Line 1 project and lower contribution due to outages at Tanjung Bin Energy power plant.
Revenue was flat at RM944.43 million against RM950.26 million in the same period a year ago.
The group told Bursa Malaysia that it remains positive of its prospects, driven by stable performances of its operating companies together with contribution from ongoing construction projects.
The ports and logistics division is expected to register higher revenue across all the ports. With the completion of the acquisition of a 49% stake in Penang Port Sdn Bhd (PPSB) and the proposed acquisition if the remaining 51% equity interest will contribute positively to the group’s future earnings as it allows full consolidation of PPSB as a wholly owned subsidiary.
Meanwhile, the energy and utilities division will continue to see positive contribution from the group’s associate companies, Malakoff Corp Bhd and Gas Malaysia Bhd.
MMC said its substantial existing order book provides earnings visibility for the engineering and construction division, anchored by the MRT Line 2 underground work and project delivery partner (PDP) role for elevated portions.
“Furthermore, the earnings contribution from engineering and construction division will be sustained by ongoing projects, namely Langat 2 water treatment plant, Langat centralised sewerage treatment project and our involvement in the PDP role for Pan Borneo Sabah Highway,” it added.
MMC’s net profit went down 33.1% from RM176.36 million to RM118.06 million on the back of a 0.9% drop in revenue from RM1.89 billion to RM1.87 billion.
MMC gained five sen to RM2.38 yesterday on 115,400 shares done, giving the company a market capitalisation of RM7.25 billion.