MMC Corporation Berhad (MMC or the Group), a premier utilities and infrastructure group recorded a 29.7% increase in Profit Before Zakat and Taxation (“PBZT”) to RM115 million compared to RM88 million reported in the corresponding financial period ended 31 March 2019 due to higher contributions from Port of Tanjung Pelepas (“PTP”) and Johor Port Berhad (“Johor Port”), higher share of results of associates, namely Malakoff Corporation Berhad (“Malakoff”) and higher interest income and lower operating expenses at Klang Valley Mass Rapid Transit Sungai Buloh-Serdang (“KVMRT-SSP Line”). These were offset with lower contribution from Northport Malaysia Bhd (“Northport”) and Kontena Nasional Berhad (“KNB”).
The Group recorded a revenue of RM1.09 billion compared to RM1.14 billion in the corresponding financial period ended 31 March 2019 due to lower work progress from underground work packages for KVMRT-SSP Line, lower volume handled at Northport and lower contribution from KNB. These were cushioned by higher volume handled at PTP and Johor Port.
Review of Key Operating Companies
The Ports & Logistics division recorded revenue of RM801 million, an increase of 2.6% compared to RM780 million reported in the preceding financial period ended 31 March 2019, mainly due to the higher volume handled at PTP and Johor Port, offset by lower volume handled at Northport and lower contribution from KNB.
The division recorded higher PBZT by RM19 million to RM123 million compared to RM104 million reported in the corresponding financial period ended 31 March 2019 due to higher volume handled at PTP and Johor Port, and gain on disposal of an asset held for sale at Johor Port. These were partially offset by lower contribution from Northport and KNB.
The Energy & Utilities division recorded increase in PBZT to RM41 million compared to RM32 million reported in the corresponding financial period ended 31 March 2019 due to higher contribution from Malakoff attributed to contribution from Alam Flora Sdn Bhd following the completion of acquisition on 5 December 2019, and higher share of profits from its associates.
The Engineering division recorded a revenue of RM264 million compared to RM338 million reported in the corresponding financial period ended 31 March 2019 due to lower work progress from underground work packages for KVMRT-SSP Line.
The division recorded an increase of 23.5% in PBZT to RM61 million from RM49 million reported in the corresponding financial period ended 31 March 2019 attributed to higher interest income and lower operating expenses at KVMRT-SSP Line.
The Group is cognizant of the challenging business environment in financial year 2020 in view of the global economic contraction arising from the COVID-19 pandemic. Measures taken by the governments all over the world to contain the COVID-19 pandemic have affected global economic activity and the Group expects our performance to be affected, the extent of which will depend on the severity and duration of the outbreak. Nevertheless, the Group continues to exercise prudence in its business dealings to navigate through this challenging year.
The Ports & Logistics division will focus on resource optimisation amid the uncertainty in the global container volume outlook. Continuous vigilant investments into the ports’ infrastructures, capacities and capabilities along with the operational efficiency and group-wide cost synergies initiatives are expected to be the anchor to the overall Port & Logistics performance.
The Energy & Utilities division is expected to provide consistent earnings to the Group from the contributions by its associated companies, namely Malakoff and Gas Malaysia Berhad.
The Engineering division will continue to provide earnings visibility for the Group from its substantial existing order book, anchored by the KVMRT-SSP Line project. The division remains active in its efforts to replenish its order book whilst focusing on the execution and timely completion of its existing projects.
MMC Group anticipates the challenging environment to remain in the short to medium term. The Group will continue to monitor the situation closely and to focus on resource optimisation to reduce its operating cost in line with the challenging economic outlook.
Dato’ Sri Che Khalib Mohamad Noh, Group Managing Director of MMC Corporation Berhad said, “We are committed to strengthen our market position by focusing on operational performance and efficiency and capability improvements, whilst exploring new opportunities”.