KUALA LUMPUR (Aug 27):Hap Seng Consolidated Bhd’s second quarter net profit fell 66% to RM44.08 million or 1.77 sen per share, from RM129.79 million or 5.21 sen per share a year earlier, as all of its business segments except for plantation were affected by the Movement Control Order.

Revenue for the second quarter ended June 30 (2QFY20) fell 43.32% to RM989.58 million, from RM1.75 billion in 2QFY19, the group’s stock exchange filing showed.

This was the group’s weakest quarterly performance since 4QFY09, when it made a net profit of RM7.69 million on RM679.6 million in revenue.

The main casualties were the property, automotive and building materials segments, due to operation halts during the quarter.

The credit financing segment also saw lower loan disbursements due to more stringent loan approval processes, amid current economic uncertainties. The non performing-loans ratio also rose to 2.4% from 1.65% at end-2QFY19.

Its trading division also saw a slowdown in fertiliser demand, as well as its sales of mosaic tiles due to disruption in construction activities.

For the six-month period ended June, Hap Seng’s net profit fell 28.95% to RM204.45 million or 8.21 sen per share, from RM287.77 million or 11.56 sen per share a year earlier, on the back of the weak 2Q as its first quarter still eked out bottom line growth.

Half-year revenue fell 29.5% to RM2.46 billion from RM3.5 billion, on weaker contribution from all segments.

On prospects, Hap Seng anticipates a challenging period for the credit financing and trading divisions, while the property and automotive segments may see some cushion from the government’s ongoing initiatives to spur spending under the Penjana economic recovery plan.

Meanwhile, the building materials segment could also see some pick up as construction activities resume, whereas the plantation segment’s better performance in 2Q is seen to moderate as demand normalises and production enters the peak of its cycle.

Shares of Hap Seng fell 12 sen or 1.5% to close at RM7.88 today, valuing the group at RM19.62 billion.  

Edited by S Kanagaraju