Hap Seng achieves RM50.3mil earnings in 3Q23

KUALA LUMPUR: With one more quarter left to go, Hap Seng Consolidated Bhd is cautiously optimistic of a satisfactory results for its current financial year.

The conglomerate said palm oil inventories are expected to remain high in the coming months as lower demand is expected from major palm oil importers, India and China, due to high inventories and competition from rival edible oils.

“Crude palm oil prices in the forthcoming months are expected to be influenced by the seasonally high production of palm oil.

“This is in tandem with the high cropping season of fresh fruit bunches (FFB) and competition from rival edible oils, soy oil and sunflower oil,” it said in the notes accompanying its financial results.

It added that production costs are expected to remain high due to inflationary pressures and the elevated prices of fertiliser, diesel and other input materials as well as higher labour costs.

“Nevertheless, the group’s plantation division continues to put concerted efforts to improve the overall cost efficiencies of its operations while practising good plantation husbandry to improve FFB yield and extraction rates to mitigate unit production costs,” it said.

Meanwhile, its property division will continue to put in efforts to drive property sales and optimise occupancy rates and rental yield of its investment properties, which are expected to to perform favourably.

Hap Seng said its hospitality segment is expected to benefit from the continuing growth in the tourism sector with improving tourist arrivals.

In the building material division, it said its quarry, asphalt and bricks businesses are expected to continue to benefit from the ongoing major projects in Sabah, Sarawak and Brunei.

The group’s Singapore-listed Hafary Holdings Ltd is projected to benefit from the residential property resale market, which is anticipated to remain relatively stable in the fourth quarter of this year, and the launches of build-to-order flats by the Housing Development Board.

In the third quarter ended Sept 30, 2023, Hap Seng recorded a net profit of RM50.3mil compared with RM563.75mil in the previous corresponding quarter.