Hong Leong Asia posts 38% drop in H2 earnings to S$12 million on lower revenue

INDUSTRIAL conglomerate Hong Leong Asia saw its net profit fall 38.3 per cent to S$12 million for the second half ended December 2022, from S$19.4 million the previous year.

This was led by a 14.8 per cent decline in H2 revenue to S$1.8 billion, compared with revenue of S$2.1 billion in the corresponding period the year before.

The declines were mainly due to lower revenue from its diesel engines unit (Yuchai) in China, which fell 19.8 per cent, or S$362.8 million, to S$1.5 billion.

Hong Leong Asia’s Yuchai unit sold 140,345 engines in H2, compared with 171,449 units in the corresponding period the previous year.

This was due to lower engine sales in the truck, bus and marine and power generation application markets, partially offset by higher sales in agricultural and industrial engines.

The drop in group revenue was partially offset by higher revenue from its building materials unit (BMU), which increased by 22.2 per cent or S$55.2 million to S$303.4 million.

The group chalked this up to a rebound in sales volumes and pricing as construction activities in Singapore and Malaysia continued to recover.

The latest results bring full-year earnings to S$54.5 million, down 9.3 per cent from the year before, while FY2022 revenue was 21.3 per cent lower at S$3.9 billion.

Looking ahead, Hong Leong Asia said improved economic activities in China should gradually lead to greater growth opportunities for Yuchai’s portfolio of powertrains and engines.

SEE ALSO

Hong Leong Asia H1 net profit up 4.5% to S$42.6 million despite lower revenue

Brokers’ take: CGS-CIMB raises target on Hong Leong Asia in anticipation of construction recovery

Shares of Hong Leong Asia closed 2.9 per cent or S$0.02 higher at S$0.71 on Friday (Feb 24), before the announcement.