KUALA LUMPUR (Aug 24): Hap Seng Consolidated Bhd recorded a nearly five-fold rise in net profit to RM661.89 million for the second quarter ended June 30, 2023 (2QFY2023) from RM132.58 million a year ago, boosted by a disposal gain.

The group recognised a disposal gain of RM594.98 million from the disposal of its entire stake in HS Credit (Manchester) Ltd, a company involved in the provision of term loans to corporations in the United Kingdom.  

Additionally, the better profitability was due to a higher share of results of associates and joint ventures at RM11.83 million from RM9.48 million in 2QFY2022, and a lower tax expense of RM46.79 million against RM65.72 million previously.

Earnings per share rose to 26.59 sen, from 5.33 sen in 2QFY2023, according to the group's bourse filing on Thursday (Aug 24).

Hap Seng, which trades in fertilisers and building materials and sells Mercedes-Benz vehicles, saw its operating profit fall 34% to RM176.94 million from RM267.72 million in 2QFY2022, due to lower profit contributions from the plantation and credit financing divisions.

Hap Seng's revenue slid 3.09% to RM1.65 billion from RM1.7 billion previously, mainly due to lower revenue from the plantation and trading divisions.

No dividend was declared for the quarter

The improved quarterly net profit also led to Hap Seng more than doubling its cumulative net profit to RM712.66 million  for the first six months of FY2023 from RM288.89 million last year.

Six-month revenue fell 3.19% to RM3.24 billion from RM3.35 billion previously.

Hap Seng, which was removed from the MSCI Emerging Market Index in end-May, hit an eight-year low of RM3.05 in June. On Thursday, the stock closed down two sen or 0.56% at RM3.52, giving the group a market capitalisation of RM8.76 billion.  Year to date, the counter has fallen 45%.