KUALA LUMPUR: Hap Seng Consolidated Bhd saw its net profit grow 37.5% to RM106.48 million or 4.28 sen per share for the fourth quarter ended Dec 31, 2016 (4QFY16), from RM77.44 million or 3.59 sen per share a year ago, mainly driven by increased earnings contributions from its plantation and fertiliser trading divisions.

Quarterly revenue also increased 11.7% to RM1.21 billion from RM1.08 billion in 4QFY15 on higher revenue from all divisions except the automotive division.

In a filing with Bursa Malaysia yesterday, Hap Seng said the plantation division’s 4QFY16 operating profit rose 55% year-on-year (y-o-y), thanks to higher average selling price realisation of crude palm oil (CPO) and palm kernel.

The fertiliser trading division’s operating profit rose 142% y-o-y to RM6.5 million in 4QFY16, as it benefited from better margins achieved in the Malaysian operations.

Hap Seng added that its property division’s operating profit was affected by the net loss from fair value adjustments to its investment properties, resulting in a lower operating profit of RM28.4 million in the current quarter under review.

Meanwhile, the auto division’s operating profit was lower by 16% y-o-y in 4QFY16, mainly due to lower sales volume and sales mix variance with higher sales of lower-priced models.

For the full FY16, the group posted an annual net profit of RM1 billion or 42.36 sen per share, compared with RM908.47 million or 42.26 sen per share in FY15. Revenue rose 11.3% to RM4.89 billion in FY16, from RM4.39 billion the previous year.

Going forward, Hap Seng is cautiously optimistic about achieving satisfactory results for FY17 as it expects CPO prices to be lower in the second half of the year as production recovers.

It also foresees a challenging year ahead for its property division amid the current soft consumer sentiments. “In spite of this, the division will be launching several new projects in 2017,” the group said.

At the same time, demand for fertilisers is expected to pick up in the coming months as plantations are expected to resume their fertilising activities after the year-end wet weather conditions which inhibited fertiliser applications in the preceding quarter.

“Demand for fertilisers is expected to be further supported by the current high palm oil prices. Nevertheless, [the] business environment is anticipated to remain competitive amid volatility in foreign exchange movements,” said Hap Seng.