Hock Seng Lee sees Q2 earnings jump to RM14.12mil - Business News

KUALA LUMPUR: Hock Seng Lee Bhd posted a net profit of RM14.12mil in Q2 ended June 30, 2018, a 44% improvement over RM9.78mil recorded in the previous corresponding quarter as revenue surged 103% to RM154.25mil.According to the group, the improved performance was due to higher construction activities carried out during the quarter. "Accelerated execution of its mega-projects, as they entered mid-phases of construction, had led to improvement across all financial measures," it said in a press statement.The board of directors has declared a first interim dividend of one sen per share payable on Oct 10, 2018.For the quarter under review, revenue for the group's construction segment more than doubled to RM138.69mil from RM59.15 mil a year earlier. Net profit before tax jumped to RM13.33mil from RM7.26 in the year-ago quarter.The property segment was flattish with a slightly lower revenue of RM15.56mil versus RM16.75mil in 2QFY17 and a similarly lower net profit before tax of RM5.52mil from RM5.86mil.Hock Seng Lee had recently announced the procurement of a new project worth RM101.19mil involving the construction of Maktab Rendah Sains Mara in Bintulu, Sarawak. "“Our successful bid for the MRSM Bintulu contract reinforces that the construction industry in Sarawak is robust and that HSL remains firmly at the forefront of it. "This new project has tipped the value of projects in hand over the RM3 billion mark to RM3.1 billion, of which some RM2.5 billion is unbilled,” said group managing director Datuk Paul Yu Chee Hoe.

Source:The Star

August 16, 2018 08:03 UTC

Public Bank’s earnings forecasts trimmed for 2018/19/20 by 1-2%, rising deposit competition - Business News

PETALING JAYA: Public Bank Bhd , which saw its net profit surge by 4.8% to RM1.40bil in the second quarter ended June 30 2018 (Q2 18), may face some pressure in net interest margin (NIM) for its full-year due to intense fixed deposit competition.UOB Kay Hian on Thursday said first half NIM remained relatively stable at 2.28% while as expected, Q2 18 NIM normalised downwards by 9 basis points (bps) as the lag effect of deposit re-pricing post the interest rate hike kicked in.Intensifying fixed deposit competition is expected to result in a marginal compression in the bank’s full-year 2018 NIM, the research house noted.“We have trimmed our earnings forecasts for 2018/19/20 marginally by 1-2% to conservatively factor in higher funding costs from a rising deposit competition impact on NIM. As such, we are now forecasting a 1-2bps compression in NIM for 2018-20 versus our initial projection of a 2bps expansion. However, this is partly offset by the lower than expected net credit costs,’’ the research house added.Some analysts recently contacted by StarBiz foresee non-interest income and NIMs of banks could take a further hit, resulting in lower earnings for banks in the second half of the year. This is expected to happen amid a softer capital market and stronger competition for deposits, resulting in a margin squeeze.They also expect competition for fixed deposits to flare up moving closer towards the implementation of the net stable funding ratio (NSFR).The upcoming Basel III NSFR is to be implemented no earlier than Jan 1, 2019. The NSFR measures a bank’s funding stability over a one-year period and complements the liquidity coverage ratio requirement, which measures liquidity over a 30-day horizon.With Bank Negara maintaining its overnight policy rate (OPR) at 3.25% and stronger competition in fixed deposits in the subsequent quarters, NIM is expected to remain compressed, hence putting pressure on banks’ margins.UOB Kay Hian, which is maintaining a buy on the stock with a higher target price of RM26.45, said Public Bank has one of the most defensive earnings profiles in the sector that would place it in a stronger position to ride out a potentially more volatile earnings environment, especially with regard to external uncertainties.Management, it adds expects policy uncertainty from the recent general election (GE14) could persist into the second half of the year, resulting in a relatively modest overall industry loans growth trends similar to that in the first half.However, given that the group is focused on its mass market consumer and SME portfolios, continued wage and employment growth should result in lower growth and earnings volatility for the group, the brokerage said.“That said, management is mindful that key downside risk could come in the form of escalating global trade tensions impacting investments and hence SME working capital growth, and ongoing monetary policy normalisation in advanced economies may lead to sharper than expected financial market adjustments in emerging markets that may impact its treasury performance.“However, we note that overall treasury revenue as a percentage of non-interest income is relatively low for the group versus its peers,’’ it said.

Source:The Star

August 16, 2018 07:52 UTC

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