Despite the soft property market, HSL will continue building and launching new phases of existing projects such as the Samariang Aman 3 to give more options to different segment of the market.
KUCHING: Hock Seng Lee (HSL) announced financial results for the third quarter ended Sept 30, with revenue for the quarter at RM161.16mil as compared to RM173.84mil over the same period last year.
The construction segment contributed RM147.54 million, while property development registered RM13.62 million, which is 92 per cent and 8 per cent respectively.
Net profit before tax for construction was RM8.89 million and property was RM4.14 million, compared to RM11.72 million and RM8.11 million for the previous year’s corresponding quarter.
The lower figures were mainly attributed to Covid-19, resulting in productivity loss — which is still at roughly half of normal — and tighter margins.
There has been an increase in operating costs and fixed overheads incurred during the Movement Control Order (MCO) and Conditional Movement Control Order (CMCO). The property segment took the hardest hit with almost 50 per cent drop in net profits.
“Like the rest of the industry, the Group had resumed work in June with strict compliance to Safe Operating Procedure.
“However, the momentum was interrupted by the Enhanced MCO placed on various parts of Malaysia,” said its managing director Dato Paul Yu Chee Hoe in a statement yesterday.
Additionally, another round of CMCO was declared for Kuching between November 9 to 22, as the district entered the red zone with more than 150 Covid positive cases in the two weeks prior.
The CMCO has been further extended to November 27.
The final single-tier tax exempt dividend of 1.4 sen per ordinary share totalling RM7.69mil for the year ended December 31, 2019, which was approved by shareholders during the AGM held in June, was paid on July 24 this year.
“We have some modest success in securing some new contracts to date of about RM101 million.
“They include an inner ring road for Kuching City valued at RM66 million, a new school in Padawan (RM13 million), water supply project in Tanjung Manis (RM17mil) and few others.
“Challenging times remain for the construction industry. HSL is not spared from issues faced by others. Labour shortages remain our chief problem, deeply limiting construction activities,” said Yu.
“Closed borders mean no foreign labour, and Sarawak’s own labour force has always been inadequate. This has actually led to higher salaries since the worker pool is much smaller. We do not foresee this matter resolving until the global health emergency is over.”
Amidst the many challenges posed by the pandemic resulting in non-working periods and reduced productivity, Hock Seng Lee is mindful of the projects’ completion dates which have to be met.
The Group is working closely with all its clients to find ways to mitigate and manage the risks and in project delivery to the reasonable satisfaction of clients, he said.
“In October , we have practically completed the Batang Rajang Bridge in Sibu which is part of the Pan Borneo Highway project.”
Despite the soft property market, HSL will continue building and launching new phases of existing projects to give more options to different segment of the market.
These include Highfields phase 2b, continuation of Precinct Grande in La Promenade, expansion of Vista Industrial Park (VIP), and the all-new Samariang Aman 3.