by NUR HANANI AZMAN / pic by TMR FILE
HAP Seng Consolidated Bhd’s overall performance for the financial year ending Dec 31, 2020, is expected to be lower than the previous financial year.
The group expects its property division’s projects in the affordable homes segment to benefit from the Home Ownership Campaign and the real property gains tax.
“It will continue to focus on its sales and marketing activities to drive property project sales. Concerted efforts will also be put to optimise its investment properties’ occupancy rates and rental yield,” the company said in a bourse filing yesterday.
Hap Seng’s credit financing division expects the challenging financing landscape to continue amid the current economic uncertainties.
Nevertheless, the division will focus on its pre-selected sectors and existing quality customers to maintain a stable and quality loan receivable portfolio.
The group, in its exchange filing yesterday, noted that the automotive division expects the sales tax exemption for new cars set to end by Dec 31, 2020, to continue fuelling consumer demand in the fourth quarter.
“The trading division anticipates the competitive business environment of its fertilisers trading in all its geographical markets to remain. Demand for fertilisers is expected to be positively underpinned by current strong crude palm oil (CPO) prices,” it said.
Hap Seng’s building materials division anticipates market conditions in its supply chain to be subdued in view of the Conditional Movement Control Order.
“It will continue to rationalise its operations to optimise costs, and expects to improve its financial performance following the recent restructuring and downsizing of its brick factories operations.
“The delay in reopening of international borders, a more pronounced downturn in the construction sector and a slowdown in renovation works caused by cautiousness in consumers’ spending are factors affecting Hafary Holdings Ltd’s business in Singapore,” it added.
Hap Seng’s net profit for the third quarter ended Sept 30, 2020, improved slightly to RM193.73 million from RM193.14 million a year earlier due to higher contribution from the plantation division.
Revenue for the quarter fell 9% year-on-year to RM1.66 billion due to lower contribution from all divisions except the plantation and automotive divisions.
The company announced a second interim dividend of 15 sen per ordinary share to be paid on Dec 22.
Revenue from its plantation division stood at RM128.9 million, 47% higher than the preceding year corresponding quarter mainly attributable to higher average selling prices realisation and higher sales volume of CPO and palm kernel.
Its property division, however, reported a 19% decline in turnover at RM462.3 million from RM572.3 million due to lower contribution from construction activities and lower sales of non-strategic properties.
However, it is mitigated by higher sales of completed project stocks and higher contribution from its investment properties segment.
Its automotive division recorded a 35% higher revenue at RM507.6 million from RM367.6 million attributable to improved performance from both the passenger car and commercial vehicle segments.
“Sales of passenger cars in the current quarter were 48% above the previous year corresponding quarter with improvement in average gross profit margin due to sales mix,” it said.
Hap Seng’s share price ended five sen or 0.6% lower at RM8.30 yesterday, valuing the group at RM20.66 billion.