Hap Seng records net profit of RM50.3mil in 3Q

KUALA LUMPUR: With one more quarter left to go, Hap Seng Consolidated Bhd is cautiously optimistic of a satisfactory result for the current financial year.

For the coming months, the conglomerate said palm oil inventories are expected to remain high as lower demand is expected from major palm oil importers, India and China, due to high inventories and competition from rival edible oils.

“CPO prices in the forthcoming months are expected to be influenced by the seasonally high production of palm oil in tandem with the high cropping season of FFB and competition from rival edible oils, soyoil and sunflower oil,” it said in the notes accompanying its financial results.

It added that production costs are expected to remain high due to inflationary pressures and the high prices of fertiliser, diesel and other input materials as well as higher labour costs.

“Nevertheless, the group’s plantation division continues to put concerted efforts to improve the overall cost efficiencies of its operations whilst practising good plantation husbandry to improve FFB yield and extraction rates to mitigate unit production cost,” said Hap Seng.

Meanwhile, the group’s property division will continue to put concerted efforts to drive property sales and optimise occupancy rates and rental yield of its investment properties which are expected to continue to perform favourably.

The group said its hospitality segment is expected to benefit from the continuing growth in the tourism sector with improving tourist arrivals.

In the building material division, Hap Seng said its quarry, asphalt and bricks businesses are expected to continue to benefit from the ongoing major projects in East Malaysia and Brunei.

The group’s Singapore-listed Hafary Holdings Ltd is expected to benefit from the residential properties resale market which is anticipated to remain relatively stable in the fourth quarter of this year and the launches of Build-To-Order flats by the Housing Development Board.

In the third quarter ended Sept 30, 2023, the group recorded a net profit of RM50.3mil, which compares ot RM563.75mil in the previous corresponding quarter.

The group’s basic earnings per share fell to 2.02 sen from 22.64 sen in the comparative quarter.

Revenue, meanwhile, was RM1.54bil, down from RM1.97bil in the same quarter in 2022.

Cumulatively, the group’s net profit over three quarters was RM762.96mil, down from RM852.63mil in 9MFY22 and revenue was down to RM4.78bil from RM5.32bil.