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Hock Seng Lee 1Q net profit slips to RM7.55m

KUALA LUMPUR (June 18): Sarawak-based construction specialist Hock Seng Lee Bhd posted a decline in net profit for the first quarter ended March 31, 2020 to RM7.55 million from RM14.09 million in the same quarter last year.

The group’s revenue also dropped to RM112.40 million from RM146.72 million previously, of which 90% was contributed by the construction segment, while the property development segment's contribution was at 10%.

In a filing with Bursa Malaysia, it said both segment's revenue and profit were lower due to the Covid-19 pandemic and enforcement of the Movement Control Order (MCO) effective March 18.

Lower revenue in the property development segment was due to the timing of recognition of sales with lower profit margin due to discounts and promotions as well as some increase in construction costs.

In a separate statement today, group managing director Datuk Paul Yu Chee Hoe said the company's order book currently stands at RM3.4 billion with an outstanding balance of RM2.2 billion.

"In any depressed market, there will naturally be fewer launches. Affordability is key. As such, the company's only major launch will be Samariang Aman 3, a best-seller for over a decade.

"We'll start with 126 units of single- and double-storey, terrace and semi-detached houses. We expect house buyers to react with delight to these landed properties at a time when most new cheap launches have been apartments,” he said.

The group is cautiously hopeful that infrastructure developments will remain a priority for state and federal governments’ spending in Sarawak.

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