Hong Leong Asia H1 net profit up 110% to S$40.7m

HONG Leong Asia's net profit rose 110 per cent year on year to S$40.7 million for the half year ended June 2021, boosted by higher sales and revenue in its diesel engines and building materials units.

The industrial conglomerate logged S$2.8 billion in revenue for the period, up 32.8 per cent from S$2.1 billion. Earnings per share stood at 5.45 Singapore cents.

Its engine-making unit Yuchai had 33.8 per cent year-on-year growth in engine units, ahead of China's transition to more stringent emission standards. In 2018, China finalised China VI standards that would apply to new heavy-duty diesel vehicles nationwide in two stages. Yuchai expects the market for commercial vehicle engines to slow down after a strong "pre-buying effect" in H1 FY2021.

Demand for precast products under BMG Singapore, its building materials unit in Singapore, was strong as government tenders for housing "increased substantially", the group said in a business update on Thursday.

However, it noted a challenging operating environment in Malaysia due to rising Covid-19 infections and because its government had re-imposed a total nationwide lockdown in June.

Not only has Malaysia's movement control order disrupted construction projects in Malaysia, it has also interrupted the production of precast concrete components for construction work in Singapore.

"The overall economic recovery is showing signs of slowing down as countries continue to battle the spread of the Delta variant even as they are preparing to open their economies safely," Hong Leong Asia said.

Shares of Hong Leong Asia ended Thursday down 4.5 Singapore cents, or 4.8 per cent, at 89.5 cents.