Hit by rising costs, Hup Seng Industries' profit falls 15%

KUALA LUMPUR: Hup Seng Industries Bhd, which posted a lower net profit of RM3.03mil in the second quarter ended June 30, expects the operating environment to remain highly competitive this year.

“The sharp increase in the global commodity prices and the government’s gradual withdrawal of food and fuel subsidies which put pressure on the group’s input costs remains a concern.

“The group will monitor closely the development of commodity prices, evaluate and adjust its pricing strategies, and/or re-sizing major products when the need arises. The group will leverage operational efficiencies and cost savings initiatives so as to achieve a most satisfactory performance,” Hup Seng said in the notes accompanying its financial report.

In the second quarter, Hup Seng’s revenue rose 11% to RM73.8mil against RM66.5mil a year earlier mainly due to an increase in selling prices. Its earnings per share for the quarter stood at 0.38 sen from 0.45 sen a year earlier.

The board of directors has recommended an interim single-tier dividend of 1 sen per ordinary share in respect of the year ending Dec 31. The entitlement date will be announced in due course.

For the first six months to June 30, Hup Seng posted a net profit of RM9.8mil, or EPS of 1.23 sen, down 27.1% from RM13.45mil, or 1.45 sen EPS last year, while revenue climbed to RM153.1mil from RM149.24mil previously.

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