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Hong Leong Asia posts 9.2% rise in Q3 net profit to S$3.4m

HONG Leong Asia on Thursday announced third-quarter net profit rose 9.2 per cent to S$3.4 million, even as gross profit declined, as lower profit was attributed to non-controlling interests. 

Without accounting for a loss from discontinued operations, net of tax, the industrial conglomerate's net profit would have been 22.3 per cent higher. 

Gross profit was down 6 per cent to S$131 million for the quarter ended Sept 30, as cost of sales jumped 6.6 per cent to S$657.6 million, outpacing a 4.3 per cent increase in revenue to S$788.6 million. 

Hong Leong Asia blamed it on higher production costs for National VI engines under Yuchai, its diesel engine unit, and pricing pressure. 

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Earnings per share for the quarter was 0.46 Singapore cent, down from 0.84 cent in the year-ago period. 

The group operates in China, Singapore and Malaysia, but generates nearly 90 per cent of the total revenue from its businesses on the mainland. 

In its outlook, Hong Leong Asia said China's economy is "under mounting downward pressure" from "complicated and severe" economic conditions both at home and abroad as well as slowing global economic growth. 

Hence, the prospects and the domestic market condition for Yuchai are expected to remain challenging, the group said.