CONGLOMERATE MMC Corp Bhd (2194) will not report a loss in its fiscal third quarter, a source said, denying a research report that it may be in the red due to provisions for windfall tax charges.
"There will be provisions but it is not finalised yet. In any case, we should have enough of a buffer to make a profit," the source said.
OSK Research Sdn Bhd said in a report yesterday that MMC, which operates ports and power plants, may report losses in its third quarter as it makes a full provision for windfall tax charges.
The group could provide RM212 million, which is the full year payment, in that single quarter instead of spreading it over a longer period.
OSK acting head of research Chris Eng said he had expected MMC to make a net profit of about RM190 million in the quarter to September 30 2008.
"Reporting a loss during the current volatile market conditions will not be favourably viewed by investors," Eng said.
MMC is due to report its third quarter results on November 27.
The group could also make another RM51 million provision in the fourth quarter to be prudent with a dispute surrounding the SMART tunnel. A subcontractor has made a claim for RM102 million after its job was cancelled, but this is being disputed by MMC and its equal partner Gamuda Bhd.
As a result, OSK has downgraded its call on the stock to "neutral" and trimmed its fair value to RM3.48 from RM3.60 before.
Shares of MMC closed unchanged at RM1.85 yesterday.
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