Hiap Teck records 4th consecutive quarterly loss

by **Cals** Wed 16 Dec 2015, 01:40

Hiap Teck records 4th consecutive quarterly loss

By Danial Idraki / theedgemarkets.com | December 15, 2015 : 7:11 PM MYT

KUALA LUMPUR (Dec 15): [size=16]Hiap Teck Venture Bhd ([You must be registered and logged in to see this image.] Valuation: 1.20, Fundamental: 0.35) registered a net loss of RM37.22 million for its first quarter ended Oct 31, 2015 (1QFY16), mainly due to its share of loss from a jointly controlled entity, making it its fourth consecutive quarterly loss.

A year ago, it registered a net profit of RM2.85 million, its filing to Bursa Malaysia today showed. Its latest quarterly revenue, however, was 3.2% higher at RM317.31 million compared with the RM307.46 million it recorded in the same period last year.

Its share of loss from the jointly controlled entity amounted to RM50.21 million, which is due to unrealised foreign exchange loss arising from US dollar-denominated shareholders' loan and the higher costs associated with trial production.

"To minimise its losses, the jointly controlled entity has temporarily suspended its trial production in October 2015," it added.

Going forward, the group said the global steel industry is currently facing falling prices and overcapacity.

"However, the current headwinds are expected to moderate in 2016 based on a forecast that the Chinese economy will stabilise," it added.

On the local front, the group foresees that steel industry players would be having a challenging time as they struggle with the increase in cheaper imported products from China that are squeezing domestic steel prices.

"Margin for the local steel industry has worsened," the group noted.

Shares in Hiap Teck closed unchanged at 26.5 sen with 385,400 shares done, giving it a market capitalisation of RM188.9 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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