KUCHING: Hock Seng Lee Bhd (HSL) has recorded a 15 per cent increase in earnings for the second quarter of 2014 (2Q14) from the first quarter of the year.
In a quarterly report to Bursa Malaysia, HSL highlighted that revenue for the quarter under review is RM140.21 million compared to the preceding year corresponding quarter’s figure of RM140.37 million while the net profit before tax for the current quarter is RM25.41 million compared to RM30.24 million for the preceding year’s corresponding quarter.
As for HSL’s half yearly pre-tax profit, it stood at RM47.4 million on the back of revenue at RM256.2 million.
According to managing director Dato Paul Yu Chee Hoe in a statement, turnover in the second quarter has picked up considerably, achieving RM140.2 million against the RM116.0 million achieved in the first quarter
“This demonstrates that several major works are picking up momentum and progressing beyond their start-up phases,” Yu added.
The group noted that for the three-month period ended June 30, 2014, revenue and net profit before tax for its construction segment increased to RM132.20 million and RM22.98 million from the previous year’s corresponding quarter figures of RM120.43 million and RM22.92 million respectively.
“The revenue for the current quarter has improved by 10 per cent as compared to the previous year’s corresponding quarter while profit before tax remained steady,” HSL said.
As for its property development segment, for the period ended June 30, 2014, the revenue and net profit before tax decreased to RM8.01 million and RM2.42 million from the previous year’s corresponding quarter figures of RM19.94 million and RM7.31 million respectively.
HSL explained that this was mainly due to higher properties sales in 2013 arising from new project launches.
Given the commendable results, the HSL Board has approved a first interim single-tier tax exempt ordinary dividend of six per cent payable to shareholders on Oct 8, 2014. The dividend entitlement date shall be Sept 18, 2014.
“With our consistent financial performances over the past several years, we have made a tradition of paying out an interim dividend to our valued shareholders,” said Dato Paul Yu.
Overall, the value of HSL’s projects in hand is presently around RM2.1 billion with RM1.1 billion unbilled. Works completed thus far in 2014 include the Tanjung Bako access road, some dredging works and infrastructure works at Demak Laut Industrial Estate – all in Kuching.
New contracts, combined with the commencement of the group’s residential property project ‘Samariang Aman 2, Phase 4’, have generated a total of RM205 million worth of works year to date.
Projects in Sarawak Corridor of Renewable Energy (SCORE) are progressing well. HSL is assisting the state to provide essential infrastructure for the multinational investors operating and setting-up in the vast corridor of central Sarawak.
HSL further highlighted that SCORE, in turn, is becoming an increasingly important driver of the state’s construction industry. For example, some 70 per cent of HSL’s new contracts for 2014 are derived from the SCORE heavy industry town of Samalaju.
“We are still actively bidding for a range of contracts including several in the SCORE growth node towns of Samalaju, Mukah and Tanjung Manis,” said Yu.
He added that there is an urgent need for water supply, access roads and other essential infrastructure in these areas.
The dynamic pace of development in the SCORE region looks set to continue to provide more opportunities for HSL in the years ahead.
HSL’s current ongoing works include some nine road works contracts, three building construction contracts, flood mitigation, water supply and other infrastructure projects including Package 1 of the Kuching Centralised Wastewater Management system which is at an advanced stage.
“Overall, we see turnover in the second half of this year continuing to pick-up pace with momentum gaining on several large projects.
“We also anticipate further procurement successes based on our competitive edge in marine engineering,” said Yu.