More profits for Hock Seng Lee

Posted on August 26, 2011, Friday

KUCHING: Well connected marine engineering  Hock Seng Lee Bhd (HSL) has reported a strong performance for its first half of 2011.
HSL’s financial results for the six months to June 30, saw net profit before tax rising 22 per cent against the first half of 2010, from RM42.18 million to RM51.48 million.

According to a statement, on a quarter-on-quarter basis, earnings before tax grew from a record high of RM23.98 million for second quarter of 2010 (2Q10) to RM27.94 million for 2Q11.
Revenue for the first half of 2011 also saw strong growth, up 34 per cent to RM272.51 million from RM203.66 million at the mid-year point in 2010.
Managing director Datuk Paul Yu Chee Hoe said that HSL had an exceptional first half in 2010 and yet managed to do better that this year.
“With our existing contracts in hand, we are comfortably poised to emulate past years of growth in 2011, but I am also confident that we can add to the RM153 million worth of new contracts we have secured so far,” Yu said.
HSL’s current order book stands at some RM1.7 billion, with RM1.1 billion outstanding.
Potential projects would include further high-tech tunneling and construction works for Kuching’s centralised sewerage system, flood mitigation works in Sibu and Kuching, as well as roads and educational institutions in central Sarawak.
While rapid urbanisation and industrialisation in Sarawak promoting the progress of public sector infrastructure in the cities and towns, the Economic Transformation Programme had also placed emphasis on rural development.
HSL would seek to use its marine engineering and infrastructure capabilities to assist with projects such as rural water supply and provision of power to more remote parts of the state.
Meanwhile, at the coastal Sarawak Corridor of Renewable Energy growth node towns of Tanjung Manis, Mukah and in particular Samalaju, foreign private investors had been proceeding with construction of their facilities. Lured by ample, well-priced power supply, their smelters and factories would be fuelling construction activity in the less-developed parts of central Sarawak.
“The prospects for HSL continue to be very good as there are abundant opportunities for us to draw on our marine engineering, civil engineering and construction skills,” said Yu.
“With no borrowings and cash reserves of over RM100 million, HSL has the financial capacity as well as the technical capabilities to take on additional major infrastructure works,” Yu noted.
In conjunction with the first half year financial report, Yu announced that the board had approved a first interim ordinary dividend of six per cent per share less tax at 25 per cent and payable to shareholders on October 7.
The dividend entitlement date would be this September 15.
“Our policy is always to reward our loyal stakeholders with the best possible dividends while taking a prudent approach to maintaining reserves for capital expenditure and project start-up costs,” said Yu.