KUALA LUMPUR (May 31): Chin Hin Group Bhd's net profit fell 53% to RM3.78 million for the first quarter ended March 31, 2018, from RM8.05 million a year ago, mainly due to higher costs.

The integrated building materials solutions provider said it incurred initial production costs totalling RM1.12 million for its new start-up companies Starken Drymix Solutions Sdn Bhd, Sage Evergreen Sdn Bhd and G-Cast UHPC Sdn Bhd.

The group's finance costs had also increased by RM1.1 million during the quarter due to the drawdown of additional banker's acceptances, revolving credit and term loan to finance Starken AAC Sdn Bhd, working capital and the capital expenditures on its new Autoclaved Aerated Concrete (AAC) block and panel plant at Kota Tinggi, Johor.

In a filing to Bursa Malaysia, Chin Hin said earnings per share fell to 0.68 sen from 1.59 sen in the year-ago first quarter.

Quarterly revenue rose 1.4% to RM265.32 million, from RM261.56 million previously, due to higher revenue from the manufacturing of AAC blocks, precast concrete products, steel mesh products, ready-mixed concrete sector and the new modular business.

This was, however, offset by the decrease in revenue from the group's distribution of building material, fire rated doors, lockset and MI Polymer Concrete products.

The group said the operating environment is expected to remain challenging following the May 9 general election, which saw a change of government.

"We remain focused on growing our manufacturing of AAC block and modular business. We are confident that our strong fundamentals and resilience will enable us to deliver a satisfactory financial performance this year," the group said.

Chin Hin shares closed down 5 sen or 5.7% at 83.5 sen, giving a market capitalisation of RM478.5 million.