Hap Seng Consolidated 2Q net profit up on disposal gain

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KUALA LUMPUR (Aug 29): Hap Seng Consolidated Bhd's net profit grew by a marginal 2.1% to RM644.22 million in the second quarter ended June 30, 2018 (2QFY18), versus RM631.21 million a year ago, on a gain of RM516.02 million from the disposal of its 100% stake in HSC Sydney Holding Ltd.

According to its Bursa filing, earnings per share rose to 25.88 sen for 2QFY18 compared with 25.36 sen for 2QFY17.

Quarterly revenue also rose 16.9% to RM1.53 billion, from RM1.31 billion in 2QFY17.

For the cumulative six months (1HFY18), net profit rose 2.2% to RM798.67 million from RM781.71 million a year ago, while revenue increased 23.1% to RM3.06 billion from RM2.48 billion in 1HFY17.

On prospects, Hap Seng said it is optimistic of achieving satisfactory results for the financial year ending Dec 31, 2018 (FY18).

It added that global macroeconomic factors, such as the financial crisis in Turkey and the weakening rupee affecting the palm oil market, will continue to influence the palm oil division's prospects for FY18.

As such, palm oil prices are expected to be under pressure due to high palm oil inventories at 2.21 million tonnes at end-July 2018.

The group also expects the property market for luxury segment to soften, while the affordable housing segment will continue to be resilient.

The credit financing division will continue its focus on growing its term loan portfolio albeit with cautiousness in view of uncertainties in the current global and domestic economic environment, it added.

Hap Seng's automotive division, meanwhile, is expected to continue to benefit from the "tax holiday period" which ends on Aug 31.

This division also expects its vehicle and after sales segment's market share to improve further with expanded market coverage via its new autohaus in Puchong South, which was launched at end-April 2018, as well as another new autohaus in Setia Alam scheduled to commence business in 4QFY18.

Shares of Hap Seng closed unchanged at RM9.84 today, for a market capitalisation of RM24.5 billion.