Impairment provision tips Hong Leong Industries into the red in Q4

PETALING JAYA: Hong Leong Industries Bhd swung into the red in the fourth quarter ended June 30, 2017, registering a net loss of RM104.57 million against a net profit of RM69.49 million in the previous corresponding period, due to a one-off impairment provision of the group’s investment in associate Malaysian Newsprint Industries Sdn Bhd (MNI) amounting to RM172 million.

Hong Leong Industries said it is no longer required to equity account for the future results of MNI as MNI has commenced creditors’ voluntary winding-up proceedings.

“In the event of any residual value from the liquidation process, the group will recognise any recoveries in future period,” Hong Leong Industries said in a filing with the stock exchange.

Hong Leong Industries' fourth-quarter revenue was marginally lower at RM569.01 million versus RM573.6 million in the same quarter a year ago.

Meanwhile, the group’S full-year net profit slumped 58.3% from RM247.22 million to RM103.09 million. However, revenue rose 4.2% from RM2.19 billion to RM2.28 billion.

Barring any unforeseen circumstances, Hong Leong Industries expects performance for both the consumer products and industrial products segments to be satisfactory for the financial year ending June 30, 2018.

Hong Leong Industries went down two sen to close at RM9.78 yesterday, with some 48,200 shares changing hands. It has a market capitalisation of RM3.21 billion.