Hiap Teck see sevenfold rise in Q2

PETALING JAYA: Steel player Hiap Teck Venture Bhd saw its net profit for the second quarter ended Jan 31, 2018 increase by more than sevenfold to RM30.54 million from RM3.90 million a year ago due to lower finance costs and share of profit recognised from a joint venture (JV) as opposed to a share of loss in the same quarter last year.
The profit recorded by the JV was due to unrealised foreign exchange gain as a result of the strengthening of the ringgit against the US dollar in the quarter under review.
Revenue for the quarter grew 12.39% to RM302.48 million from RM269.12 million due to higher selling prices from its trading and manufacturing divisions albeit a lower sales volume for the quarter.
The group expressed optimism over the outlook of the steel industry and said that it will continue to strive for positive performance this year.
“However, the recent announcement by the United States under Section 232 of the Trade Expansion Act 1962 to impose 25% import tariffs on steel products may have an impact on the steel export market globally. The group remains optimistic on the steel industry outlook in Malaysia as it is well supported by the strong fundamentals in the construction activities as evidenced by the 5.8% growth in the construction sector in the fourth quarter of 2017. This positive growth is attributed to all sub-sectors particularly in public transport infrastructure projects,” it said.
“The group is committed to remain focus and continue to undertake prudent measures to improve our efficiency on manufacturing costs, procurement strategies and working capital management to sustain its costs leadership in the sector,” it added.
For the cumulative period of six months, its net profit increased multifold to RM46.58 million from RM2.94 million.
Revenue for the period grew slightly by 2.32% to RM560.97 million from RM548.25 million.
The stock gained 3.70% to close at 42 sen with 6.91 million shares done.