MMC’s 2Q earnings balloon after Malakoff’s listing

by **Cals** Thu 27 Aug 2015, 00:29

MMC’s 2Q earnings balloon after Malakoff’s listing

GEORGE TOWN (Aug 27): MMC Corp Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)’s net profit shot up over eight times to RM1.35 billion or 44.32 sen per share in its second financial quarter ended June 30, 2015 (2QFY15), largely due to an exceptional gain and a fair value re-measurement of its investment after the listing of Malakoff Corp Bhd on the Main Market of Bursa Malaysia in May.
The IPO netted it a gain of RM388.8 million from the sale of Malakoff shares RM388.8 million, besides resulting in a fair value re-measurement of its investment of RM955.4 million.
Its net profit in 2QFY14 was reported to be RM165.45 million or 5.43 sen per share, while 2QFY15 revenue almost halved to RM1.44 billion from RM2.87 billion in the corresponding period last year.
Meanwhile, in the cumulative six months (1HFY15) period, net profit expanded over seven times to RM1.45 billion (1HFY14: RM189.03 million) – again largely due to Malakoff’s listing – while revenue shrunk to RM3.4 billion (1HFY14: 4.73 billion).
“The decrease (in revenue) was mainly due to the deconsolidation of Malakoff’s results following its listing debut...and lower work progress recorded from Klang Valley Mass Rapid Transit (KVMRT) Sungai Buloh-Kajang (SBK) Line project, largely upon completion of tunnelling drive works in April,” MMC said.
Revenue from its energy and utilities segment fell 25.5% to RM2.05 billion in 1HFY15 compared to last year, primarily due to the deconsolidation of Malakoff’s results.
Its ports and logistics segment’s revenue rose 10.3% in 1HFY15 to RM884.4 million (1HFY14: RM801.9 million), mainly due to higher throughput handled at Pelabuhan Tanjung Pelepas Sdn Bhd (PTP), following gradual progress from the 2M alliance between Maersk Line and Mediterranean Shipping Company, launched in January.
The segment saw profit before zakat and taxation (PBZT) of RM168.9 million, up 40% in 1HFY15 (1HFY14: RM120.6 million), in line with higher throughput handled at PTP, and lower operating costs from fuel costs and repairs and maintenance works.
Conversely, its engineering and construction segment recorded a reduced 32% profit before zakat and taxation at RM112.1 million, and 50% lower revenue of RM458.3 million in 1HFY15 compared to last year due to lower contribution from KVMRT-SBK project.
Its investment holding, corporate and others segment declined 88.3% in revenue to RM29.9 million, mainly on the recognition of a sale of land in 2014 by Senai Airport City Sdn Bhd as part of the overall development of airport city plan in Johor.
The segment recorded loss before zakat and taxation of RM220.4 million compared with RM194.0 million in the corresponding period of the preceding year, mainly attributed to provision for impairment on claims recovery of a discontinued project in Middle East.
Looking forward, the group expects its full FY15 to be better than last year as it expects the increase in stake inNCB Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) to 30.13% would spur growth in its ports and logistics segment.
“The division is also expected to grow its revenue on the back of growing volumes at PTP and Johor Port.
“Revenue at the energy and utilities division is also expected to improve consistent with the full recovery of Malakoff’s Tanjung Bin power plant as well as higher gas volume sales at Gas Malaysia ([You must be registered and logged in to see this image.] Financial Dashboard).
“The group remains positive on its prospects, driven by stable performance of its operating companies together with contribution from on-going construction projects,” it said.
MMC rose three sen or 1.91% to close at RM1.60 yesterday, giving it a market capitalisation of RM4.87 billion.