PETALING JAYA: Malaysian Resources Corp Bhd’s (MRCB) net profit for the third quarter ended Sept 30, dropped 63% to RM920,000 from RM2.52 million a year ago due to slower construction progress arising from strict compliance to standard operating procedures and movement restrictions during the CMCO and RMCO as well as the lockdown implemented in Victoria State in Australia, which impacted revenue recognition from its 1060 Carnegie in Melbourne.
Its revenue fell 20% to RM297.63 million from RM372.74 million.
For the nine-month period, MRCB posted a net loss of RM203.04 million compared with a net profit of RM17.71 million in the previous year’s corresponding period largely due to impairment provisions resulting from the pandemic in the second quarter of 2020.
Excluding these provisions, the group would have recorded a profit of RM15 million in the first nine months of 2020, despite the total halt of construction and other disruptions to construction work during the MCO/CMCO period.
Revenue rose 5% to RM890.56 million from RM847.76 million contributed mainly by the property development & investment division.
On the property development & investment division’s prospects, the group believes the outlook for the economy and the property market will remain challenging for the foreseeable future and has embarked on austerity and cost-cutting measures.
The company’s immediate priorities in 2020 remain on enhancing cash flow by monetising its inventory of unsold completed stock and focusing on its projects in hand. The group will continue to closely monitor conditions in the broader economy and property market, revising its strategies and financial targets accordingly, including reviewing its future launches if conditions dictate.”
On engineering, construction & environment prospects, MRCB said it is continuing to actively tender for more contracting projects to replenish its order book, but there have been very few new large construction projects put out to tender in 2020 to date. The division had open tenders valued at RM2.69 billion as at Sept 30, 2020, while its external client order book stood at RM21.9 billion.
“The LRT3 project, which is currently 39% completed and well on schedule to meet the targeted 40% completion by end 2020, should see profit recognition pick up in 2021, albeit at a slower pace due to the implementation of stricter standard operating procedures to prevent the spread of Covid-19,” MRCB said.