KUALA LUMPUR (Jan 24): Hock Seng Lee Bhd (HSL), which suffered from margin squeeze last year, is confident of improving its profit margin to double digits in the financial year ending Dec 31, 2018 (FY18).

The confidence hinges on expectation that its three mega projects in Sarawak would progress smoothly.

Last year, the delays in phase 2 of the Kuching centralised wastewater management system project, as well as Package 7 of the Pan Borneo Highway dragged HSL’s net profit margin to around 9% in the second and third quarter of FY17.

Speaking at the sidelines of Invest Malaysia 2018, managing director Paul Yu Chee Hoe said the issues, such as contractual matters, that had affected the profit margin have largely been resolved.

“Our 4QFY17 results will be better than the last quarter (3QFY17). We see the margin issue in 2017 as an anomaly. Our priority now is to digest [our existing order book]. We have to catch up,” he said.

“Whatever time extension we get, we want to focus on finishing the three projects, together with the 15 smaller projects we have secured,” said Yu, referring to the two aforementioned projects and the Miri wastewater treatment plant and sewer networks.

Yu, however, noted that the Miri project is progressing as scheduled, but guided that the Kuching project will be delayed by several months.

In total, HSL has 18 projects in hand presently, with an outstanding order book worth RM2.7 billion.

“We will not stop bidding for new projects, but now we are more selective,” said Yu, who declined to share an expected value. The group secured RM575 million worth of new jobs in 2017.