Muhibbah Engineering counts on bright prospects to see price uptrend

An upward move is anticipated for Muhibbah Engineering (M) Bhd after closing above 82 sen on Dec 11.

Investors are probably concerned about the company’s prospects having plunged into the red with a net loss of RM4.4 million in the third quarter ended Sept 30, 2024 from a net profit of RM6.1 million a year ago.

This was despite it posting a higher revenue of RM423.4 million in 3QFY24 from RM287 million a year earlier.


On a 9 month basis, Muhibbah fared pretty well, jumping 141% year-on-year to RM32 million from RM13.3 million a year ago.

This was on the back of a surge in revenue to RM1.4 billion from RM814.8 million a year earlier.

It reported lower consolidated revenue of RM554.5 million as compared to RM728 million in the preceding quarter mainly due to lower revenue from infrastructure construction and cranes divisions.

This quarter reported lower profit before tax of RM6.5 million as compared to RM47.5 million in the preceding quarter was mainly due to better performance from concession division.

It has somewhat offset the lower performance from infrastructure construction and cranes divisions mainly due to unrealised foreign exchange losses of RM29.5 million in current quarter caused by sharp appreciation of MYR during September 2024.

This was where the exchange rate moved from 4.72 to 4.122. However, the forex rose back to 4.482 as of 18 November 2024.

Consensus is projecting that Muhibbah’s bottom line will recover with net earnings of RM52.6 million in FY Dec 2024 and RM69.5 million in FY Dec 2025.

This implies prospective PERs of 11.4x this year and 8.6x next year, respectively.

Forward earnings will be driven by its secured order book of RM1.38 billion across both the construction and cranes divisions as of 21 Nov 2024.