Tek Seng posts RM6.54mil earnings in second quarter

Tek Seng said the PVC segment was the major contributor to its revenue during the six-month period.

PETALING JAYA: Tek Seng Holdings Bhd reported a net profit of RM6.54mil in its second quarter ended June 30,2020, compared with a net loss of RM3.99mil in the previous corresponding period mainly due to improved sales mix recorded by the company’s PVC segment.

Tek Seng said the improved earnings was also due to lower impairment loss of property, plant and equipment recorded by the solar segment.

Revenue in the second quarter was lower at RM41.29mil compared with RM46.12mil a year earlier.

The company said in a filing with Bursa Malaysia that its PVC segment saw an increase in pre-tax profit by RM2.6mil from RM6.5mil to RM9.1mil, mainly due to improved sales mix.

Meanwhile, its solar division registered a decrease in pre-tax loss by RM16.6mil from RM17.5mil to RM900,000, mainly due to lesser impairment loss of property, plant and equipment and lower depreciation.

For the six-month period ended June 30,2020, Tek Seng reported a net profit of RM11.15mil compared with a net loss of RM3.51mil in the previous corresponding period, while revenue was higher at RM93.29mil compared with RM90.19mil a year earlier.

Tek Seng said the PVC segment was the major contributor to its revenue during the six-month period.

The company said its PVC segment saw an increase in pre-tax profit by RM6mil from RM9.4mil to RM15.4mil during the first half of the year, mainly due to higher revenue and improved sales mix.

As for solar, this division registered a decrease in pre-tax loss by RM19.9mil from RM21.1mil to RM1.2mil, mainly due to lower impairment loss of property, plant and equipment and reduced production overhead.

On its prospects, Tek Seng said it foresaw the performance for 2020 to remain stable for its PVC business.

It added, however, that the segment may be affected by fluctuation in the price of raw materials as a result of the market uncertainty due to the Covid-19 pandemic and the impact from the fluctuation in foreign currency.

“Moving forward, Tek Seng will focus on producing PP non-woven materials to cater for medical appliances.

“However, the company will be taking cautious approaches to mitigate the exposure by improving its operational efficiency, product quality and innovation as a step forward to sustain its growth, as well as monitoring financial aspect more closely. It will also look into exploring new markets globally.”

Tek Seng shares closed eight sen down to 86 sen yesterday.