MRCB 3Q net profit down on lower revenue from property development, construction segments

• MRCB said the decline in revenue was due to much lower contributions from the property development and investment division, as well as the engineering, construction and environment division, following the completion of three major infrastructure construction projects last year and two major property development projects in the first half of 2023 (1HFY2023).

KUALA LUMPUR (Nov 27): Malaysian Resources Corp Bhd (MRCB) reported a net profit of RM1.46 million or 0.03 sen in the third quarter ended Sept 30, 2023 (3QFY2023), down 93.84% year-on-year from RM23.70 million or 0.53 sen a year ago.

Quarterly revenue declined 41.43% to RM503.74 million in 3QFY2023 from RM860.02 million in 3QFY2022, according to the property and infrastructure company’s filing to Bursa Malaysia on Monday.

MRCB said the decline in revenue was due to much lower contributions from the property development and investment division, as well as the engineering, construction and environment division, following the completion of three major infrastructure construction projects last year and two major property development projects in the first half of 2023 (1HFY2023).

On a quarterly basis, MRCB’s net profit decreased by 86.57% from RM10.87 million in 2QFY2023, while revenue fell 15.95% from RM599.35 million in the immediate preceding quarter due to the completion of the Tria 9 Seputeh project in May this year.

For the cumulative nine months ended Sept 30, 2023 (9MFY2023), the group’s net profit came in lower at RM20.80 million, a 59.87% drop from RM51.83 million in 9MFY2022, as revenue fell 22.17% to RM1.85 billion versus RM2.37 billion a year earlier.

On prospects, the group said that it has about RM4 billion worth of properties earmarked for launch in 2024 under its property development and investment division, which will underpin a new growth cycle for the group.

“The company’s immediate priorities moving forward remain on enhancing cashflow by monetising its unsold completed stock, which stood at RM550 million on Sept 30, 2023,” it noted.

Meanwhile, for the engineering, construction and environment division, the open tenderbook currently stands at RM30 billion, which only includes project values that have yet to be finalised, such as the Shah Alam Stadium rebuilding project and the proposed redevelopment of the KL Sentral station.

As of end-Sept, MRCB’s external client order book stood at RM26.1 billion, while the unbilled portion was RM16.1 billion.

“This long-term order book will provide the division with a steady flow of construction contracts to sustain its business over the long term, including the LRT3 rail project, the first phase of which is due to be completed at the end of 2024,” it said.

MRCB shares, which have risen over 50% year-to-date, closed one sen or 2.22% lower to 44 sen on Monday, giving the group a market capitalisation of RM1.97 billion.

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