MRCB's fourth quarter earnings soar on disposal gains

PETALING JAYA: Malaysian Resources Corp Bhd's (MRCB) net profit for the fourth quarter ended Dec 31, 2016 rose over seven fold to RM188.08 million from RM26.79 million a year ago due to a gain of RM144.9 million derived from the sale of Menara Shell and RM56.1 million generated from the sale of a leasehold land to Mass Rapid Transit Corporation Sdn Bhd for RM180 million cash.
Its revenue also more than doubled to RM1.03 billion compared with RM388.20 million in the previous year's corresponding quarter.
But MRCB's net profit fell 19% to RM267.36 million from RM300.39 million a year ago.
Its revenue increased 42% to RM2.41 billion RM1.70 billion due to property development & investment division, which included a total gain of RM186.5 million arising from the disposal of Menara Shell and Sooka Sentral as well as the profit of RM56.1 million
generated from the sale of a leasehold land to Mass Rapid Transit Corp.
On its prospects, the group will continue its strategy of strengthening its balance sheet and growing its core activities of property development and engineering, construction and environment.
The group’s property development division will continue to focus on launching new projects. Registrations for the soon to be launched Sentral Suites project in KL Sentral and Kalista project in Bukit Rahman Putra have been encouraging, and along with the on-going revenue recognisation from the 9 Seputeh, and PJ Sentral projects, will underpin sales in 2017. In addition to this, the division will continue to strive to deliver a pipeline of high quality commercial buildings to be sold to other potential investors.
Construction, engineering and environment division continues to tender for more contracting projects, and is well positioned to add to its construction order book, which presently stands at RM7 billion, with an unbilled portion of RM5.6 billion.
Furthermore, the division is also placing greater emphasis to secure long-term fee based work, which utilises the division’s existing skill sets and helps reduce the volatility in its construction revenues.
Margins from the division’s key construction projects should also begin to improve as they progress from their preliminary phases and begin to mature.