Haw Par H2 earnings up almost 100% to S$57.1m; board proposes S$0.15 dividend

MAINBOARD-LISTED Haw Par H02 : H02 0% Corporation saw its earnings for the second half of FY2021 benefit from higher consumer spending and higher dividends from strategic investments, thereby almost doubling to S$57.1 million.

For the 6 months to December 2021, the manufacturer of the Tiger Balm line of products delivered a 98.4 per cent year-on-year jump in net profit from S$28.8 million.

Earnings per share improved to S$0.258 from S$0.13. Revenue rose 149.8 per cent, from S$30.2 million to S$75.3 million.

The group, which also engages in investments and leisure activities, said in its financial results filed on Friday (Feb 25) that consumer spending picked up and takings from goods tripled. Also, gross margin improved from 17.4 per cent to 52 per cent as production capacity utilisation surged during H2 FY2021, compared to H2 FY2020.

Other income increased 44.2 per cent to S$46.9 million due to higher dividend rates from strategic investments, which included shares in United Overseas Bank and UOL Group. The value of these investments rose by 12.2 per cent to S$2.5 billion as their market values were higher as at Dec 31, 2021.

Haw Par had S$596.2 million in cash as at end-2021, up from S$554.4 million in 2020, with net asset value per share also improving to S$14.51 from S$13.04 - higher than its Friday closing price of S$11.62 (up S$0.12).

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As bank borrowings had been fully repaid in the first half of 2020, Haw Par did not have any loans recorded as at end-2021.

A dividend of S$0.15 for H2 FY2021 would be paid out on May 26 if approved by shareholders, bringing the total dividend payout for FY2021 to S$0.30, on a par with that for FY2020.

For the full year, a decline of 8.1 per cent in earnings to S$110.1 million was reported despite a 27.2 per cent improvement in the top line to S$141.2 million. The higher turnover was mainly driven by the recovery of its healthcare business, Haw Par said.

Turnover from the healthcare segment increased 33.8 per cent to S$124.4 million as consumer demand improved. Turnover from leisure and property declined 7.1 per cent, due mainly to Underwater World Pattaya, where operations had been affected by pandemic-induced movement restrictions.

Haw Par expects to benefit from the economic recovery as borders reopen. But the recovery trajectory may be disrupted by any worsening of the pandemic situation or a heightening of geopolitical tensions.

The valuation of the strategic investments may also be affected by disrupted economic recovery, it said.