‘MRT job cancellation poses no impact on TRC Synergy’

PETALING JAYA: PublicInvest Research does not foresee any material impact on TRC Synergy Bhd despite losing a Mass Rapid Transit Line 2 (MRT2) job.
The research house said as the contract sum is small at only RM74.4 million, the job termination will not have any material effect on the group’s earnings.
On Monday, TRC Synergy announced that its relocation job for MRT 2 project had been cancelled. The group, however, is still negotiating with the project delivery partner – MMC Gamuda KVMRT Sdn Bhd on the quantum of compensation it is liable to receive.
On a separate note, PublicInvest Research noted that TRC Synergy delivered a much improved earnings performance in Q3, due to improved margins and forex translation gains which bolstered its net profit by 77.6% to RM15.1 million. Its nine-month net profit, however, declined 3.7% to RM20.7 million.
“TRC Synergy’s FY16 earnings were adjusted upwards by around 40%, to account primarily for forex gains,” it said.
TRC Synergy’s outstanding orderbook is estimated at RM1 billion, driven by jobs such as the Pan Borneo Highway.
PublicInvest Research is maintaining a “trading buy” call on TRC Synergy with a target price of 50 sen.
“Going forward, jobs in the pipeline, among others include LRT3, MRT2 rail links and Pan Borneo Sabah,” it said.
Meanwhile, PublicInvest Research said TRC Synergy is expected to launch its long awaited Ara Damansara property project in the first quarter of 2017. It consists of serviced apartments, hotel, office block and retail mall.
The gross development value of the project is around RM1 billion with the first phase estimated to be RM300 million. TRC Synergy shares dropped 2 sen or 4.82% to close at 39.5 sen yesterday.