Sunday, September 20

HSL sees RM610.36 mln revenue in FY18

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KUCHING: Sarawak-based marine engineering and infrastructure firm Hock Seng Lee Bhd (HSL) released strong annual financial results for the year ended December 31, 2018 yesterday.

Good progress on the mega projects during 2018 enabled the group to record a revenue of RM610.36 million, up some 45 per cent from the RM420.02 million (as restated in line with new accounting policies) attained for the year 2017.

Net profit before tax had grown to RM72.15 million for the 12 months of 2018 against the RM64.05 million (restated) earned for the 12 months of 2017.

“Our financial results are all the more commendable in the face of volatile commodity prices, variations in fiscal policies, wage hikes and increased competition,” said HSL’s managing director Dato Paul Yu.

“HSL has displayed its renowned resilience in what was a tumultuous year for the construction industry,” he added.

HSL’s order book of RM2.9 billion as at Dec 31 2018, is substantial and had risen further since the beginning of 2019 to some RM3.1 billion and of this figure, RM2.2 billion is unbilled.

Miri Wastewater project is on schedule for a mid-2021 completion date with some tunnel boring operations running around-the-clock while Kuching City Wastewater Management System (Package 2) contract is scheduled to complete in 2023.

The Pan Borneo Highway project has picked up momentum and is expected to complete in 2021.

All up, presently HSL has 17 contracts ongoing, having added some RM200 million in new works, including new property development launches in 2018.

New contracts include construction works for Petronas’ latest training centre and packages for infrastructure related to Sarawak Energy’s Matang substation.

Among projects successfully handed over in 2018 were three in the Sarawak Corridor of Renewable Energy (SCORE) region namely Samalaju Boulevard Package One, the road into the Samalaju Industrial Park from Tanjung Kidurong and works for the Samalaju substation establishment.

Despite a softening market, the property sector under wholly-owned subsidiary Hock Seng Lee Construction Sdn Bhd (HSLC) continues to perform creditably and the sector contributed 18 per cent to the group bottom line in 2018.

Some RM92 million worth of property projects were completed in 2018, comprising mostly the Eden Commercial Centre shophouses and industrial buildings for Vista Industrial Park (VIP) Block 1.

The high end homes at HSL’s 200-acre La Promenade mixed development are proving to be a prestigious lifestyle choice in Kuching with the estate lauded for award-winning landscaping and advanced security.

“We have RM240 million worth of property development projects ongoing and will launch approximately RM160 million worth of new projects in 2019,” said Yu.

Industrial units for VIP Block 6 were launched last month while later in the year the remaining 56 units of super-link homes for Precinct Luxe and 25 units of three-storey bungalows and duplexes for Precinct Grande will be launched at La Promenade.

The popular residential estates of Samariang Aman 2 and Highfields 3B in Kuching will also have new residential phases come on the market.

The property sector is expected to contribute positively to the financial performance for the group going forward.

“Overall, our home state of Sarawak is tendering out a number of substantial infrastructure projects such as the Coastal Road and Trunk Road project packages and we shall be capitalizing on such upcoming opportunities as they suit our capabilities,” said Yu.

In view of the pleasing growth recorded across our financial measures, the board has recommended a final single-tier tax exempt dividend of 1.4 sen per ordinary share pending approval at the upcoming annual general meeting (AGM).

Added to the interim single-tier tax exempt dividend of one sen per ordinary share paid on Oct 10 2018, the cash dividend for 2018 would total 2.4 sen per ordinary share.