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Haw Par Q2 raises interim dividend as profit drops 58% to S$48 million
HAW Par Corp's second-quarter net profit fell 58.3 per cent to S$48.4 million, or 22.1 Singapore cents per share, in the absence of year-ago disposal gains and on a drop in dividend payouts from its equity investments.
The maker of Tiger Balm ointments is declaring an interim cash dividend of 10 Singapore cents per share, up from the year-ago payout of six Singapore cents per share. Haw Par shares closed at S$8.90 on Friday, lower by 0.2 per cent or two Singapore cents, before the results were announced.
For the half year ended June 30, net profit dropped 49.4 per cent to S$65.4 million, or 29.8 Singapore cents per share.
The bulk of the second quarter's profit decline was attributed to changes as a result of Haw Par's partial divestment of its shares in Hong Kong-listed Hua Han Health Industry Holdings, which was an associated company of Haw Par's before the partial disposal. In the second quarter of 2015, Haw Par posted a S$55.8 million gain in equity accounting of Hua Han; in the second quarter of 2016, that gain was just S$107,000.
But Haw Par also saw other income drop 26.2 per cent to S$35.5 million as it received lower dividend income from its equity investments. Haw Par owns stakes in United Overseas Bank, UOL Group and United Industrial Corp.
Quarterly revenue was flattish, increasing by 2.8 per cent to S$52.6 million.
Healthcare revenue stayed flat at around S$44.2 million, although operating profit from the segment increased 9.7 per cent to S$14.7 million.
Leisure revenue increased 15.5 per cent to S$4.1 million as visitorship spiked at Underwater World Singapore during its last month of operations. Gate prices were reduced at the attraction, however, which dragged leisure profit to a decline of 20.1 per cent.
Property revenue increased by 34.2 per cent to S$4.3 million on improved occupacy, and profit from the segment kept up with a 34.1 per cent improvement to S$3.3 million.
Looking ahead, Haw Par expects its investments to be affected by volatility amid uncertain global economic conditions. The company is guiding for stable property income in the midst of a challenging market. The outlook for health care is cautiously optimistic.