Hap Seng Consolidated 2Q net profit lower on absence of gain

TheEdge Thu, Aug 29, 2019 09:44pm - 4 years View Original


KUALA LUMPUR (Aug 29): Hap Seng Consolidated Bhd’s net profit for the second quarter ended June 30, 2019 (2QFY19) fell  to RM129.79 million from RM644.22 million a year ago when there was major disposal gain.

Excluding the gain of RM516.02 million from the disposal of HSC Sydney Holding Ltd in 2QFY18, Hap Seng said its profit before tax for 2QFY19 would have fallen 2.7%, whilst profit after tax would have been 1.3% higher.

Operating profit at RM250.2 million was 9% higher than the preceding year's corresponding quarter, it said, with better results from property, credit financing and building materials divisions dampened somewhat by lower contributions from the plantation, automotive and trading divisions.

Quarterly revenue rose 14.1% to RM1.75 billion from RM1.53 billion in 2QFY18 as all but its plantation and building materials divisions contributed higher revenue.

In a filing with Bursa Malaysia, Hap Seng said its property division’s operating profit was 4% higher than in 2QFY18, benefiting from higher contribution from project development and construction segments, including The Aria Luxury Residences located in the Kuala Lumpur city centre.

The group’s credit financing division continued to achieve a higher loan base of RM3.96 billion at the end of 2QFY19, representing a 20% growth over RM3.3 billion a year ago.

Meanwhile, its building materials division — comprising quarry, asphalt and bricks businesses as well as the trading and manufacturing of building materials — registered an 87% higher operating profit of RM6.6 million, mainly attributable to better margins and lower operating expenses.

Hap Seng’s plantation division registered an operating loss of RM4.1 million, affected by lower average seling price and lower sales volume.

Profit fell 82% at its automotive division due to fewer units sold and lower margins from passenger vehicle sales, coupled with start-up and dealers’ network development costs of the commercial vehicles wholesale distribution business.

Trading margins for both fertilizers trading and general trading businesses were lower compared with the preceding year's corresponding quarter due to competitive market conditions, resulting in a marginal decline in profit.

For the first half of the year (1HFY19), Hap Seng’s net profit stood at RM287.77 million down from RM798.67 milion in 1HFY18 while cumulative revenue grew 14.3% to RM3.5 billion from RM3.06 billion,

The group said it is optimistic of achieving satisfactory results for FY19.

Shares in Hap Seng rose 29 sen or 3.02% to close at RM9.90 today, bringing it a market capitalisation of RM24.65 billion.

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