Malaysian Resources Corporation Berhad (MRCB) recorded Revenue of RM592.9 million and a Loss Before Tax of RM195.2 million in the first half of 2020.
While Revenue increased by 25% compared to the first half of 2019, due to revenue recognition from the completed 1060 Carnegie development in Melbourne, losses were recorded due to impairment provisions totalling RM202.5 million on the recoverability of contract assets, trade and other receivables mostly from certain completed construction projects impacted by the pandemic.
Had these provisions not been prudently recognised, the Group would have recorded a small profit of RM7.4 million in the first half of 2020, despite the total halt of construction during the MCO/CMCO in the period.
Commenting on the results, Encik Imran Salim, Group Managing Director said, “As we cautioned earlier, the COVID-19 pandemic had a very significant impact on our operations in the second quarter. We believe it is prudent to recognise these impairments, as we now have serious doubts in the recoverability of these contract assets, trade and other receivables, as they emanate from a sector that has been impacted severely by the on-going pandemic.”
The Property Development & Investment Division recorded a 115% increase in Revenue to RM336.4 million and a 52% decrease in Operating Profit to RM22.6 million in the first half of 2020, compared to RM156.4 million and RM47.0 million respectively in the corresponding period in 2019. The increase in Revenue was mainly due to revenue recognition from 1060 Carnegie, upon the settlement and handover of purchased units following its construction completion in December 2019, as well construction progress at Sentral Suites in KL Sentral, which saw a 2-fold increase in revenue recognition to RM68.9 million compared to RM33.5 million in the corresponding period in 2019.
The decline in Operating Profit was mainly due to minimal construction progress during the MCO and CMCO period. The Division sold RM86.1 million worth of properties in the first half of 2020 and had unbilled property sales of RM1.3 billion.