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Hong Leong Asia H1 net profit down 5.7% to S$19.4m after drag by associates

HONG Leong Asia posted a 5.7 per cent drop in net profit to S$19.4 million for the six months ended June 30, 2020, from S$20.5 million a year ago.

This came as the mainboard-listed company recorded a lower share of results from associates and joint ventures, net of income tax, according to results released on Thursday.

Earnings per share stood at 2.59 Singapore cents for the half year, down from 2.75 cents a year ago.

Revenue for the first half rose 4.2 per cent to S$2.14 billion, from S$2.05 billion a year ago. This was mainly due to higher revenue recorded by its diesel engines unit, partially offset by the revenue decline of its building materials unit.

Share of results of associates and joint ventures, net of income tax, slumped 85.5 per cent to S$334,000 from S$2.3 million a year ago, mainly due to losses from associates from the building materials unit.

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No dividend was declared for the half year, unchanged from a year ago, as the company incurred losses for the period under review.

Hong Leong Asia said there remain uncertainties which will impact the pace of recovery in the countries it operates in, such as the threat of subsequent Covid-19 infection waves from imported cases, and worsening US-China trade tensions.

"With the strong balance sheet and positive cash flow from operations, we are cautiously optimistic that we will be able to ride through the challenging second half of 2020," the company said. 

Shares of Hong Leong Asia were trading S$0.01 or 2 per cent lower at S$0.50 as at 10am on Friday.

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