KUALA LUMPUR: Construction company Hock Seng Lee Bhd’s (HSL) net profit fell 17.17% to RM16.25mil in the first quarter ended March 31 from RM19.62mil previously.
Its revenue for the quarter stood at RM142.25mil, down from RM186.46mil in the same period a year ago. Earnings per share for the quarter stood at 2.96 sen from 3.57 sen last year.
During the quarter, HSL said the value of projects in hand reached a record RM2.7bil, with new contracts secured in the period worth RM1.89bil. It secured two new mega projects – a 76km section of the Pan-Borneo Highway and the second package of Kuching’s Centralised Wastewater Management System.
The Pan-Borneo Highway contract is known as package 7, Bintangor to Julau Junction, Btg Rajang Bridge and Sibu Airport to Sg Kua, with the contract period until late 2020.
The wastewater management project, which will bring HSL’s tunnel boring equipment and expertise to the fore, will stretch until 2022 and connect a significant portion of northern Kuching city to an expanded sewerage treatment plant.
“The beginning of 2015 saw many projects achieving good momentum or in their final stages. In contrast, the beginning of this year, 2016, sees us in the very early phase of the major new projects.
“However, with the two mega projects stretching 4-6 years, HSL has strong earnings visibility going forward,”managing director Datuk Paul Yu said in a statement.
HSL said given the volume of projects in hand, the group would remain prudent in its cash management and may consider a modest level of bank financing for capital and project expenditure.
“Out of HSL’s historically high order book of RM2.7bil, some RM2.4bil was outstanding as at March 31, 2016 which represents four times the annual revenue of 2015,” HSL said.
Yu said that while contracts in hand would last several years, HSL would continue bidding efforts as the group had the capacity to take on further works.
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