Malaysian Resources Corporation Berhad (MRCB) recorded Revenue of RM1.2 billion and Loss Before Tax of RM152.9 million in 2020, as a result of RM175.3 impairment provisions relating to completed construction projects impacted by the pandemic.
Without these provisions, the Group would have recorded a profit of RM22.4 million in 2020. Since the resumption of construction activities disrupted by the various movement restrictions, the Group has seen continued improvements in its profitability, reflecting its ability to recognise more revenue as construction progress gained momentum, albeit at a slower pace compared to prepandemic levels.
This is seen by the stronger performance in the 2nd half of 2020, which produced Revenue of RM606.5 million and Profit Before Tax of RM42.2 million, compared to Revenue of RM592.9 million and Profit Before Tax, excluding the impairments, of RM7.3 million in the 1st half of 2020. The Property Development & Investment Division recorded a 12% increase in Revenue to RM635.1 million, which was largely due to revenue recognition from its 1060 Carnegie project in Melbourne, upon the financial settlement of purchased units.
However, there have been delays in financial settlements and a slowdown in sales as Victoria State in Australia implemented much tougher movement restrictions and total lockdowns during the second half of 2020.
The Division recorded lower Operating Profits of RM46.7 million in 2020 compared to RM76.8 million in 2019, mainly due to disruptions from various movement restrictions throughout the year, and their impact on construction progress billings.
The 39% decline in Operating Profits was further amplified by a gain before tax of RM58.8 million from the disposal of the Group’s entire 30% equity interest in One IFC Sdn Bhd recorded in 2019. The Division sold RM187.3 million worth of properties and had unbilled property sales of RM1.1 billion at the end of 2020.