Hong Leong Asia posts 3.9% rise in Q1 net profit to S$12.2m

INDUSTRIAL conglomerate Hong Leong Asia on Wednesday posted a net profit from continuing operations of S$12.2 million in the first quarter, up 3.9 per cent from the same period a year earlier. 

The results exclude its de-consolidated consumer products unit Xinfei, which ceased to be a subsidiary on May 21 last year. Xinfei had posted a net loss of S$17.2 million in the first quarter last year. 

Revenue in the three months ended March 30 was S$961 million, down 5.6 per cent from the same period a year earlier, as higher revenue from the building materials unit (BMU) failed to make up for lower revenue at Yuchai, the group's diesel engines unit.

Yuchai's revenue decreased by S$66.2 million or 7.3 per cent from the same period a year earlier. It sold 101,300 engines in the first quarter, down 8 per cent. The unit sales decrease was mainly due to lower engine sales in the truck and bus segments which was partially offset by higher engine sales in the off-road segment.

BMU's revenue rose by S$11.8 million or 11.6 per cent from the same period a year earlier, mainly due to improved performance of the Singapore operations as the construction industry recovers. In Malaysia, the group's subsidiary Tasek saw a fall in sales volume for the cement segment. The prolonged intense pricing competition continued to affect the contribution margin of Tasek in the first quarter, the group said.

Hong Leong Asia's gross profit margin was 18.2 per cent in the first quarter, as compared to 19.3 per cent in the same period a year earlier, a decrease of 1.1 percentage points.

This was mainly due to a decline in gross profit margin for Yuchai as a result of lower sales volume and change in product mix. However, gross profit margin for BMU improved as the construction industry in Singapore began to show gradual signs of recovery, the group added.

Earnings per share was 1.63 Singapore cents, up from a loss per share of 1.46 cents in the first quarter last year.

Net asset value per share was 103.45 Singapore cents as at March 31, up from 99.87 cents as at Dec 31 last year.