Hock Seng Lee 2Q profit down on lower construction income

KUALA LUMPUR (Aug 23): Hock Seng Lee Bhd’s (HSL) net profit for the second quarter ended June 30, 2017 (2QFY17) fell 21% year-on-year (y-o-y) to RM9.53 million, from RM12.08 million a year earlier, due to lower construction income.

Revenue slid 0.6% y-o-y to RM106.39 million from RM107.05 million. It will pay an interim dividend of one sen a share in respect of FY17 on Oct 10.

The company told Bursa Malaysia that its construction revenue dipped 7% y-o-y for the quarter, while profit before tax shrank 46%. The lower revenue was because major contract works were at their initial stages of execution. “The profit margin for the works executed during the quarter was also lower,” said HSL.

For the six months ended June 30, 2017, its net profit fell 27% y-o-y to RM20.8 million from RM28.34 million. Revenue fell 15% to RM211.57 million from RM249.31 million.

On prospects, HSL said it will continue to bid for projects related to its core business in infrastructure works. The company has an existing order book of RM3 billion.

This article first appeared in The Edge Financial Daily, on Aug 23, 2017.

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