KUALA LUMPUR (Sept 26): Hiap Teck Venture Bhd’s net profit (KL:HIAPTEK) for the financial year ended July 31, 2024 (FY2024) more than tripled to RM106.3 million from RM30.91 million a year ago, driven by stable steel prices, improved margins and sales volume.
Annual revenue rose 6.2% to RM1.68 billion from RM1.59 billion.
Quarterly net profit was up 11.5% to RM47.5 million against RM42.6 million in the same quarter a year ago, largely due to a substantial increase in the share of profit from a joint venture entity resulting from favourable foreign exchange translation effects and higher capacity.
This was on the back of an 8.2% decline in revenue to RM416.6 million from RM453.8 million previously, mainly due to lower average selling prices.
The group proposed to declare its first and final dividend of 0.5 sen per share for the quarter under review.
Looking ahead, Hiap Teck foresees that the global steel market will continue to face downward pressure, particularly from China, where weak domestic demand — particularly in real estate and manufacturing — is driving increased exports and putting downward pressure on global prices. This dynamic, combined with persistent geopolitical risks and currency fluctuations, continue to create significant volatility in the markets.
However, the group said that the start of monetary policy easing by the US Federal Reserve could help stablise global economic conditions and support industrial recovery.
Hiap Teck noted that the scheduled completion of its hot rolled coil (HRC) plant in 4Q this year will enhance the group's product offerings in both domestic and export markets.
To mitigate the prolonged downtrend in steel prices, the group is focused on streamlining its operations and optimising costs.
“Despite potential short-term challenges, the group’s downstream manufacturing and scaffolding businesses, together with contributions from the upstream joint venture, are expected to contribute positively to the overall performance of the group in the coming quarter,” it added.
Hiap Teck's shares closed down one sen to 34.5 sen on Thursday for a market capitalisation of RM601.1 million.