CEO Morning Brief

YTL Corp's 3Q Net Profit Rises 20% on Higher Contribution From All Business Segments

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Publish date: Fri, 24 May 2024, 09:19 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (May 23): YTL Corp Bhd (KL:YTL) posted a 19.8% increase in net profit for its third financial quarter ended March 31, 2023 (3QFY2024), as all of its business segments — construction, cement and building materials, property investment and development, management services and others, hotels, and utilities — reported higher earnings.

The quarterly net profit rose to RM496.23 million from RM414.14 million a year earlier, despite revenue coming in slightly lower by 1.7% at RM7.21 billion compared with RM7.33 billion previously, YTL Corp's bourse filing on Thursday showed.

The conglomerate's two biggest contributors were utilities through the listed YTL Power International Bhd (KL:YTLPOWR), in which it has a 49.08% direct and a 6.49% indirect stake, and cement and building materials through its 78.58% indirectly owned Malayan Cement Bhd (KL:MCEMENT), or MCement.

The cement segment's higher profit is mainly attributed to stabilisation in selling prices for both domestic cement and ready-mixed concrete and continued improvement in operational efficiencies, said YTL Corp.

MCement separately posted a 60% jump in 3QFY2024 net profit to RM101.24 million from RM63.28 million a year ago, on revenue increase of 10.9% to RM1.10 billion from RM990.71 million.

MCement declared an interim dividend of four sen per share, payable on June 26. It did not declare any dividend in the previous corresponding quarter.

The hotel segment, operated through YTL Hospitality REIT (KL:YTLREIT), where YTL Corp holds a 55% direct and a 3.63% indirect stake, also reported an increase in revenue and net profit, mainly attributable to the gain in market share as well as overall higher occupancy and room rates across all hotel assets.

Separately, YTL REIT reported that its 3QFY2024 net profit rose 35.5% year-on-year to RM33.73 million from RM24.89 million, as revenue went up by 17.1% to RM148.59 million from RM126.90 million.

For the first nine months of FY2024, YTL Corp's net profit almost tripled to RM1.61 billion from RM547.67 million in the same period of FY2023, while revenue rose by 9.1% to RM22.26 billion from RM20.41 billion.

On its prospects, YTL Corp said it expects cement demand to remain satisfactory, primarily driven by civil and non-residential sectors including infrastructure, logistics, facilities, data centres and factories. "Whilst wider economic volatility may persist in light of inflationary pressures and geopolitical uncertainties, the group will continue with its pursuit of operational, logistics, and distributional efficiencies."

Meanwhile, YTL Corp said it remains confident in the long-term prospects of the hospitality sector, despite short-term challenges. "With the return to normalcy in the jurisdictions where the group operates, coupled with a softening approach in interest rate hikes, the hospitality industry is expected to maintain a relatively positive outlook amidst risks of geopolitical uncertainty and other economic challenges."

Shares of YTL Corp closed up by six sen or 1.57% at RM3.88 on Thursday, resulting in a market capitalisation of RM42.88 billion. Meanwhile, YTL Power closed 12 sen or 3.08% lower at RM3.78, with a market capitalisation of RM30.83 billion.

MCement closed up 13 sen or 2.49% at RM5.35, valuing the company at RM7.06 billion.

For YTL REIT, its units closed up one sen or 0.82% at RM1.23 for a market capitalisation of RM2.10 billion.

Source: TheEdge - 24 May 2024

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