Mitrajaya's 3Q net profit surges 97% on higher construction contribution

by **Cals** Wed 25 Nov 2015, 23:29

Mitrajaya's 3Q net profit surges 97% on higher construction contribution

By Ahmad Naqib Idris / theedgemarkets.com | November 25, 2015 : 7:00 PM MYT

KUALA LUMPUR (Nov 25): [size=16]Mitrajaya Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 1.50)'s net profit surged 97% to RM25.82 million or 4.08 sen per share for the third quarter ended Sept 30, 2015 (3QFY15) from RM13.12 million or 2.22 sen per share a year earlier.

Revenue for the quarter soared 59% to RM231.31 million from RM145.56 million in the previous year.

In a filing with the exchange, Mitrajaya said the significantly better performance for the quarter was due to higher contribution from the construction division and its South Africa investment.

"The construction division was the major contributor to the increase in group revenue and profit before tax. It was attributable to the higher recognition from new projects secured since last year," it said.

While its South Africa investment saw lower revenue year-on-year, the division saw higher profit, attributed to better net profit margin of stands sold.

Meanwhile, its property development saw lower revenue and profit contribution during the quarter, while its healthcare segment had turned around and posted profit, despite a decline in revenue.

For the nine months ended Sept 30 (9MFY15), net profit jumped 66% to RM62.31 million from RM37.62 million in 9MFY14, while revenue was up 65% at RM62.31 million compared to RM37.62 million in the previous year.

Going forward, Mitrajaya expects strong performance for FY15, driven by its construction division and its investment in South Africa.

"The construction division will contribute significant high revenue and profit before tax for FY15, as works of the existing ongoing project [are] progressing well from the current outstanding orderbook of RM1.39 billion.

"Our investment in South Africa is also expected to record significant growth in revenue and profit for FY15. The unbilled sales currently stands at Rand 40 million (RM11.98 million), which will be recognised progressively by end of this year," said the group.

However, it expects weaker performance for its property division, as its ongoing Wangsa 9 Residency project is undergoing its initial stage of construction.

In a separate statement, Mitrajaya announced that its wholly-owned subsidiary Pembinaan Mitrajaya Sdn Bhd (PMJ) and Syarikat Ismail Ibrahim Sdn Bhd (SII) as a consortium was awarded a construction contract relating to the Refinery and Petrochemical Integrated Development (RAPID) project worth RM186.38 million.

The contract, awarded by PRPC Utilities and Facilities Sdn Bhd, entails the procurement, construction and commissioning of civil and infrastructure works at Utilities Area 1 (Package 14-0304) and Petchem Commons Area (Package 14-0305) for interconnecting, storm water drainage and utilities for the RAPID project.

"Under the contract, the duration of Package 14-0304 and Package 14-0305 is 32 months and 22 months respectively from contract award date. The contract is expected to contribute positively to Mitrajaya group's future earnings," it said.

To recap, PMJ had entered into a joint venture (JV) with SII on April 3 to tender for the contract. PMJ holds a 51% stake in the JV.

Shares in Mitrajaya fell three sen or 2.4% to close at RM1.22, giving a market capitalisation of RM802 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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