Hong Leong Industries 3Q earnings hit by lower sales due to MCO

Hong Leong Industries 3Q earnings hit by lower sales due to MCO
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KUALA LUMPUR (May 22): Hong Leong Industries Bhd’s net profit for the latest quarter dropped 36.36% due to lower volume of goods sold during the movement control order (MCO) period, and a lower share of profits from an associate company.

The group said net profit for the third quarter ended March 31, 2020 (3QFY20) fell to RM57.53 million or 18.32 sen per share, from RM90.4 million or 28.8 sen per share a year earlier.

Quarterly revenue fell 11.21% to RM621.89 million, from RM693.53 million, the group said in a filing with Bursa Malaysia.  

Hong Leong Industries proposed a second interim dividend of 25 sen per share, payable on June 25, down from 35 sen declared for 3QFY19.

This brings the group’s dividend payout for the current year to 42 sen, against 50 sen for FY19.

For the first nine months of FY20 (9MFY20), Hong Leong Industries’ net profit came in 19.5% lower at RM198.98 million, from RM247.18 million last year. Nine-month earnings per share (EPS) fell to 63.37 sen, from 78.75 sen previously.

Revenue for the period rose 3.71% to RM2.15 billion, from RM2.07 billion previously.

“In view of the uncertainty of market conditions, including adapting to the requirement of social distancing at the workplace, the group may need to streamline and rationalise its operations accordingly,” said Hone Leong Industries.

The group will also take necessary measures to conserve cash and continue to explore ways to reduce cost to mitigate the adverse impact of Covid-19 on the group’s performance, it added.

“Given the situation, the board is unable to comment on prospects for the group’s performance until such a time that the overall impact of the Covid-19 pandemic becomes clearer,” said the group.

Shares in Hong Leong Industries closed 14 sen or 1.69% lower at RM8.16 today, valuing the group at RM2.68 billion.