KUALA LUMPUR (June 25): Steelmaker Hiap Teck Venture Bhd's net profit for the third financial quarter ended April 30, 2018 (3QFY18) tumbled 95.8% to a mere RM1.34 million from RM31.94 million in 3QFY17, due to higher operating expenses and a significantly higher share of loss incurred by its joint-venture (JV) during the quarter under review.

Its filing with Bursa Malaysia this evening showed that the loss from the JV during the quarter ballooned to RM13.39 million from RM4.92 million in the previous corresponding quarter.

Meanwhile, Hiap Teck's operating expenses was notably higher at RM15.67 million against RM12.08 million in 3QFY17, which has dragged its operating profit down to RM23.32 million from RM54.21 million a year ago.

Quarterly revenue fell 18.7% to RM241.57 million from RM297.13 million, due to lower sales volume for both the trading and manufacturing divisions.

Despite the significant drop in the third financial quarter’s earnings, the group's net profit for the cumulative nine months ended April 30 (9MFY18) jumped 37.3% to RM47.92 from RM34.89 in the same period the previous year.

The group managed to record an increase in net profit despite the 5% drop in revenue to RM802.54 million in 9MFY18 from RM845.38 million last year.

For the short-term outlook, Hiap Teck foresees that steel demand will likely be weaker in the last quarter of the group’s financial year due to the festive season and the review of the mega infrastructure projects by the new government.

"However, we expect this scenario will be temporary as we strongly believe that the new government will put in place positive measures to drive the economic growth of the country in the coming months," it said.

It added that domestic demand will continue to drive growth, supported by continued expansion in private sector activities, strong support from net exports and improving global trade activities.

In a separate bourse filing, Hiap Teck announced the resignation of independent director Ng Soon Lai @ Ng Siek Chuan after completing a term of nine years as independent non-executive director of the company.

The group's share price has tumbled 31.4% % from 52.5 sen in February to a low of 36 sen today — the lowest since June last year. At today’s closing of 36 sen, Hiap Tech is valued at RM479.36 million, in terms of market capitalisation.