Wah Seong’s 2Q net profit jumps 347% to RM40.1 mil, declares 2.5 sen dividend

by **Cals** Tue 26 Aug 2014, 09:48

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Monday, 25 August 2014 20:38

KUALA LUMPUR (Aug 25): Wah Seong Corporation Bhd’s net profit for the second quarter ended June 30, 2014 (2Q14) jumped 347% to RM40.09 million or 5.18 sen a share, from RM8.97 million in the previous corresponding quarter. Revenue meanwhile, came in 47.7% higher at RM652.07 million.

For the quarter, the oil and gas (O&G) segment reported revenue of RM379.9 million, compared with RM171.7 million in 2Q13. Profit before tax (PBT) stood at RM69.9 million, compared with RM5.1 million previously.

“These significant increases reflect the continuing execution of two major pipe coating projects in the second quarter,” said Wah Seong in a filing with Bursa Malaysia.

Meanwhile, the industrial trading and services segment also reported higher revenue of RM156.5 million, compared with RM142.3 million in 2Q13. PBT for the quarter came in at RM3.3 million, compared to a loss before taxation of RM2.7 million before. Wah Seong attributed this to the impact of the new business model, which focuses on low volume high margin products.

Revenue for the renewable energy segment, however, came in lower at RM84.6 million, compared with RM90.7 million. PBT also decreased to RM14.8 million, from RM16.9 million.

“These marginal decreases were a direct result of the slowdown in the oleo-chemical industries, resulting in lower number of projects being executed during the period under review,” it said.

Over to the plantation segment, no revenue was generated as this segment is still at the development stage, said the group. A loss before taxation of RM4.3 million was reported in the quarter, lower than that of RM5.2 million in the previous corresponding quarter.

For the six months ended June 30, 2014 (6M14), Wah Seong’s net profit jumped to RM60.7 million, from RM7.42 million in the previous corresponding period. Revenue rose 30.5% year-on-year to RM1.13 billion, from RM869.4 million in 6M13. The group declared a first interim single tier dividend of 2.50 sen per share.

On prospects, the group expects its total order book of RM1.5 billion to have a positive impact on its performance for the financial year ending Dec 31, 2014.

Currently, the O&G segment has an order book of RM1.1 billion, RM282.5 million for the renewable energy segment, and RM189.4 million for the industrial trading and services segment.

Wah Seong closed up 2 sen at RM1.88, giving it a market capitalisation of RM1.44 billion.