Malaysia-based Mega First Corp Bhd reported first quarter net profit of 57.40 million ringgit ($13 million), boosted by energy sales revenue from the Don Sahong project which was completed early in the fourth quarter last year.

On Thursday it said net profit increased by 70.5 per cent from 33.65 million ringgit a year ago. Its revenue however fell by 27.5 per cent to 160.68 million from 221.84 million ringgit. Earnings per share were 13.49 sen (3.1 US cents) compared with 8.48 sen.

It said the lower revenue was mainly due to the absence of construction revenue (169.9 million ringgit in 2019’s first quarter), mitigated by 103.3 million ringgit energy sales revenue, and higher contributions from the resources division and the packaging and labels division.

However, pre-tax profit rose by 47.9 per cent to 66.5 million ringgit from 44.9 million, bolstered by profit from energy sales amounting to 64.7 million ringgit and higher profit contribution from both the resources and packaging and labels divisions, which collectively more than offset the absence of construction profit in the current quarter (45.6 million ringgit in 2019’s first quarter).

The profit after tax grew at a faster pace of 72.5 per cent when compared to growth in pre-tax profit due to lower effective tax rate.

It said income from energy sale in Laos is exempted from income tax for five years whereas a 20 per cent deferred tax provision was made on construction profits in the same quarter last year.

Mega First said the Don Sahong plant went into full commercial operation on January 7 following successful testing of and synchronisation with Electricite du Laos’ (EdL’s) new 500KV transmission line to Cambodia.

It said the first quarter revenue of 103.3 million ringgit was the energy billing to EdL for the quarter. The average energy availability factor for the period was 70.7 per cent, slightly ahead of management expectations.

“Seasonally, the energy availability factor in the current quarter is expected to be the lowest for the year as a result of the dry season in Laos which typically stretches from January to May. The energy availability factor is forecast to improve as the wet season sets from June to December,” it said.

The power division posted earnings before interest, tax, depreciation and amortisation (Ebitda) of 90.9 million ringgit and a pre-tax profit of 64.7 million ringgit, representing Ebitda and pre-tax margin of 88.1 and 62.6 per cent, respectively.

As for resource division, it said revenue rose by five per cent to 34.5 million ringgit mainly due to a 6.5 per cent increase in sales of lime products to 31.6 million ringgit.

Pre-tax profit rose by 25.7 per cent to 4.3 million ringgit from 3.4 million a year ago on higher sales volume, increased plant utilisation and lower fuel costs.

As for the packaging and labels division, its plant in Melaka, revenue rose by 29.3 per cent to 19.2 million ringgit.

The plant makes paper bags, flexible packaging products and labels and stickers for various industries including food and beverages and fast-moving consumer goods. The higher revenue was mainly due to increased sales of paper bags, as well as increase demand for flexible packaging products from new customer.

It made a pre-tax profit of 500,000 ringgit compared to a loss of 500,000 a year ago.

Mega First said when compared with the fourth quarter ended December 31, last year group turnover fell 17.8 per cent quarter-on-quarter from 195.5 million ringgit to 160.7 million.

The lower revenue was due to the absence of construction revenue (104.2 million ringgit in 2019’s fourth quarter).

However, the impact from the absence of construction revenue was however partially offset by a 68.2 million ringgit increase in energy sales to EdL from 35.1 million ringgit in the fourth quarter of last year to 103.3 million ringgit.

Mega First said first quarter pre-tax profit fell by 29.6 per cent quarter-on-quarter to 66.5 million ringgit from 94.5 million.

It said the decline in pre-tax profit was due to the absence of construction profit (68.6 million in the fourth quarter of last year), partially offset by a 36.2 million ringgit increase in pre-tax income from energy sales to EdL.

This increased from 28.5 million ringgit in the fourth quarter to 64.7 million in the current quarter.

THE STAR (MALAYSIA)/ASIA NEWS NETWORK