HSS Engineers net profit jumps 147.9% to RM3.9mil in 2Q

HSS Engineers Bhd executive vice-chairman Tan Sri Kuna Sittampalam.

KUALA LUMPUR: HSS Engineers Bhd’s (HEB) net profit surged 147.9% to RM3.9mil from RM1.6mil a year ago, on favourable project mix from project management consultancy (PMC) works for Phase 1 of Pan Borneo Highway Sabah project.

Revenue, however, dipped 2.9% to RM37.9mil from RM39mil a year ago. Its earnings per share for the quarter rose to 0.79 sen from 0.32 sen previously.

The engineering and project management consultant said as at June 30, its unbilled order book stood at RM529.4mil, providing earnings visibility over the next five years.

This had yet to incorporate the RM997.4mil appointment of the HSS joint venture (formed by HSS Integrated Sdn Bhd and HSS Engineering Sdn Bhd) by MRT Lingkaran Sdn Bhd to undertake the PMC role for MRT Circle Line (MRT 3), which will contribute to the group from the third quarter of 2022 onwards till 2033.

“Our strong financial performance this quarter underscores our improving fundamentals, which positions us aptly for the coming quarters as we undertake major projects including the PMC works for MRT3 totalling nearly RM1bil,” executive vice chairman Tan Sri Kuna Sittampalam said in a statement.

HEB also announced two corporate exercise proposals: a bonus issue of free three-year warrants on the basis of one warrant B for every three existing shares held by shareholders on an entitlement date to be determined later; as well as a private placement of up to 20% of the total number of issued shares.

Based on the enlarged number of up to 543.7 2 million issued shares assuming the full conversion of 47.86 million existing warrants A, the proposed bonus issue of warrants will entail the issuance of up to 181.24 million warrants B on the basis of one warrant B for every three HEB shares, held by the entitled warrant holders.

HEB said warrants B will be issued at no cost to entitled shareholders as a form of reward.

The exercise price of Warrant B has been fixed at 43 sen per warrant B. The full exercise of Warrants B may potentially raise up to RM 77.93mil in proceeds within the three-year tenure for future working capital purposes.

Meanwhile, the proposed private placement entails the issuance of up to 20% of the total number of issued shares of HEB.

As at Aug 16, the total issued share capital of HEB was RM254.29mil comprising 495.86 million HEB shares.

Under the maximum scenario, up to 108.74 million new HEB shares, representing approximately 20% of the enlarged number of issued shares of HEB, may be issued pursuant to the proposed private placement.

Based on the indicative issue price of 50 sen per placement share, the proposed private placement is expected to raise gross proceeds of up to RM 54.37mil under the maximum scenario.

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