• Protasco’s 1Q2016 net profit improved marginally by 1.9% Y.o.Y to RM13.4 mln as the strong contributions from both the construction and property development segments offset the weaker earnings from the maintenance segment. Revenue for the quarter, however, sank 42.0% Y.o.Y to RM127.1 mln. The reported earnings and revenue amounted to 19.1% and 9.8% of our full year net profit and revenue forecast of RM70.0 mln and RM1.30 bln respectively.
• Segment wise, the maintenance division’s pretax profit fell 42.2% Y.o.Y to RM9.9 mln due to the expiry of its seven-year state road maintenance contract that ended in 4Q2015. This resulted in lower work orders for the maintenance of federal roads in Pahang, Terengganu, Kelantan and Selangor prior to the concession renewal at mid-March 2016. The construction segment’s pretax profit, however, surged 275.6% Y.o.Y to RM4.6 mln on higher recognition from the Phase 1 of PPA1M project, which is at 70% completion.
• Its property development segment’s pretax profit, meanwhile, gained 49.0% Y.o.Y to RM3.6 mln on the recognition of Phase 2A of the De Centrum project, which is at 58.0% completion. The engineering services’ segment pretax profit, however, dipped 34.5% Y.o.Y to RM1.5 mln on increased operational costs, coupled with lower geotechnical and pavement works. The trading & manufacturing segment’s pretax profit fell 10.9% Y.o.Y to RM0.7 mln on lower demand for bitumen, while the education segment’s pretax profit stood at RM17,000 vs. a net loss of RM0.6 mln recorded in the previous corresponding quarter.

Source: M+ Online Research - 26 May 2016