KUALA LUMPUR (March 25): Steel products manufacturer Hiap Teck Venture Bhd’s net profit for the second quarter ended Jan 31, 2021 (2QFY21) jumped to RM30.05 million from RM6.97 million in the immediate preceding quarter due to higher sales volume and improved margins in tandem with rising steel prices.

Revenue climbed 53.8% to RM356.02 million from RM231.44 million in 1QFY21 due to higher sales volume and increased selling prices for both the trading and manufacturing divisions, the group said in a filing with Bursa Malaysia today.

On a yearly basis, Hiap Teck returned to the black from a net loss of RM7.66 million, while revenue grew 32.7% from RM286.27 million a year earlier.

The group recorded a profit before tax of RM37.42 million compared to loss before tax of RM7.88 million in the previous year.

“This significant variation was also contributed by the turnaround in the JV [joint venture] entity which registered a profit of RM2.88 million for the quarter under review compared to a loss of RM1.89 million in the preceding year's corresponding quarter,” said the group.

For the six-month period ended Jan 31, 2021, Hiap Teck posted a net profit of RM37.02 million versus a net loss of RM10.92 million. Its six-month revenue rose 5.27% to RM587.47 million from RM558.07 million a year ago.

Hiap Teck said rising global steel prices attributed to worldwide supply disruptions, industrial sector rebound and higher raw material prices, have benefited the steel players as margins expand in tandem with the rising prices.

“Together with the projected resumption of growth for the Malaysian economy and construction sector from the second quarter onwards, and the turnaround of our JV entity, the board is optimistic of the prospects and performance of the group for the remaining quarters of FY2021,” Hiap Teck commented on its prospects.

At market close, Hiap Teck was up five sen or 1.08% at 47 sen, valuing the group at RM658.74 million. The counter saw some 19.33 million shares changing hands.