Hiap Teck 3Q net profit dn 67.8% to RM5.42m

KUALA LUMPUR: HIAP TECK VENTURE BHD []’s net profit slumped 67.8% to RM5.42 million in the third quarter ended April 30, 2011 from RM16.87 million a year ago but the steel marker expects domestic steel demand to pick up.

It said on Wednesday, June 29 revenue declined 18.3% to RM236.45 million from RM289.62 million while earnings per share were 1.69 sen compared with 5.24 sen.

“The decrease in revenue was mainly due to lower sales volume in the current quarter. The group’s profit was affected by the lower revenue,” it said.

Hiap Teck said the pre-tax profit of RM8.20 million was 64% lower than the RM22.56 million a year ago.

However, the pre-tax profit showed an improvement from the second quarter ended Jan 31, 2011. Turnover was lower at RM236.45 million compared to RM244.85 million but pre-tax profit of RM8.20 million was higher than the RM5.35 million.

“Increase in profit was mainly due to improved selling prices and margins of steel products during the current quarter under review,” it said.

For the nine-months, net profit fell 77.4% to RM8.73 million from RM37.80 million while revenue also declined by 11.5% to RM725.80 million from RM820.67 million.

On the prospects, it said the steel industry is facing tough and challenging market conditions. Steel prices increased while buying sentiment remains weak.

“Steel buyers are cautious in making decision, restocking activities are slow. However, the Group looks forward to the improvement in the domestic steel demand when more projects under Tenth Malaysia Plan and Economic Transformation Programme are being rolled out,” it said.