KUALA LUMPUR (May 29): Hong Leong Capital Bhd saw its third quarter ended March 31, 2020 (3QFY20) net profit decline by 45.85% to RM11.07 million from RM20.43 million a year ago following a 23.5% decline in non-interest income earned during the quarter.
Earnings per share fell to 4.59 sen from 8.47 sen a year ago, according to a bourse filing.
Hong Leong Capital said its quarterly revenue declined by 12.36% to RM68.6 million from RM78.27 million posted in 3QFY19.
The group noted that its investment banking and stockbroking segment saw its quarterly profit before tax (PBT) rise by 33.9% to RM15.02 million from RM11.22 million a year ago, on higher profit contribution from its stockbroking division.
However, its fund management and unit trust management business saw PBT decline by 17.6% to RM4.09 million from RM4.96 million last year on the back of lower net contribution from management fee income.
Meanwhile, its investment holding and others segment entered into a loss before tax of RM8.58 million, from a PBT of RM2.5 million last year due to an unrealised loss on revaluation of financial assets.
For the nine months ended March 31, 2020 (9MFY20), net profit was down by 7.36% to RM58.89 million, from RM62.49 million a year prior. Nine-month revenue was marginally up at RM239.93 million, from RM237.71 million in 9MFY19.
On its prospects, the group noted the market outlook is still uncertain, with volatility on asset prices being present.
“With the current Movement Control Order (MCO)’s situation, completing some of the mandates by June 2020 is getting challenging. In addition, there is some deferment of re-issuances under existing debt programmes to 2nd half of 2020 in view of the market uncertainties.
“Notwithstanding that, new deals are being actively pursued and to build the deal pipelines for FY2021. As most clients are unable to operate fully; their corporate exercises are suspended until there is more clarity of the market conditions. Some clients have decided to terminate their corporate exercise as the current market situation has adversely affected their profitability and fundraising will be challenging,” it said.
Shares in Hong Leong Capital have been suspended since March 26, 2015, due to insufficient public shareholding spread, which stands at 18.67% as at Dec 31, 2019.