Ho Hup's 4Q net profit down 52.4% on higher operating cost

KUALA LUMPUR (Feb 20): Ho Hup Construction Co Bhd's net profit fell 52.4% to RM9.2 million or 2.62 sen a share in the fourth quarter ended Dec 31, 2016 (4QFY2016), from RM19.35 million or 5.58 sen a share a year ago, on higher operating cost from interest subsidy for purchasers and facility fees for loans undertaken during the current quarter.

Revenue also dropped 48.1% to RM44.71 million in 4QFY2016, from RM86.1 million in 4QFY2015, due to lower revenue from the building materials division.

For the full year FY2016, Ho Hup saw its net profit fall 7.2% to RM65.85 million or 18.86 sen a share, from RM70.93 million or 20.67 sen a share in FY2015, on higher finance cost due to additional financing obtained and higher operating expenses.

Revenue declined 18.3% to RM243.85 million in FY2016, from RM298.55 million in FY2015, due to lower revenue recorded by its building materials division and its in-house Aurora Place project, which is at an advanced stage of completion.

On its prospects, Ho Hup expects FY2017 to be “encouraging”, driven by all three business divisions.
 
On its construction business, Ho Hup said the division has been actively tendering projects worth RM3.3 billion.
 
As for its property development business, Ho Hup said the projects has a gross development value of RM1.7 billion. Of this total, RM500 million is for the development of service apartments in Bukit Jalil, Selangor, RM500 million for a mixed development projects in Kulai, Johor, and the remaining RM700 is for a mixed development projects in Kota Kinabalu, Sabah.
 
“The building materials division, especially the quarry business, is confident of the synergistic value to benefit the downstream production activities,” Ho Hup said, adding it is “confident” that this new streams of revenue will emerge this year.
 
Ho Hup shares closed down 0.5 sen or 0.61% at 81.5 sen today, for a market capitalisation of RM307.4 million. — theedgemarkets.com

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