Hiap Teck Venture’s 3Q net profit doubles to RM66 mil on higher steel prices

Hiap Teck Venture’s 3Q net profit doubles to RM66 mil on higher steel prices
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KUALA LUMPUR (June 29): Hiap Teck Venture Bhd’s net profit surged 119% to RM65.93 million for the third quarter ended April 30, 2021 (3QFY21), from RM30.05 million in the preceding quarter, on higher steel prices, cost optimization efforts, and contribution from its joint venture entity.

Earnings per share rose to 4.79 sen from 2.21 sen in 2QFY21, the steelmaker’s bourse filing showed.

Revenue fell 7.41% to RM329.64 million, from RM356.02 million in the preceding quarter, on lower sales volume for both trading and manufacturing divisions attributable to the Chinese New Year holidays in February.

Hiap Teck said its joint venture entity’s profit improved to RM19.81 million, from RM2.88 million in 2QFY21.

On a year-on-year basis, the group said its net profit saw a 13-fold jump from RM4.92 million in 3QFY20, while revenue doubled from RM164.59 million.

On prospects, Hiap Teck said the extension of the latest movement control order (MCO 3.0) will have a negative impact on the group’s performance in 4QFY21.

“Nonetheless, the board and management remain confident on the outlook of the group post lockdown, given the strength of steel prices and the JV entity’s continuous investments in plant and equipment to achieve cost efficiencies.

“The joint venture entity’s first 200,000 tonnes of coke oven plant is expected to complete by the second half of 2021, in which substantial cost savings can be achieved,” it added.

Hiap Teck’s share price settled half a sen or 0.88% lower at 56.5 sen today, with some 25.61 million shares exchanging hands. It saw a market capitalisation of RM855.78 million.

S Kanagaraju