Hiap Teck incurs RM138mil net loss in Q4

PETALING JAYA: Steel pipe maker Hiap Teck Venture Bhd posted a net loss of RM137.87mil for its fourth quarter ended July 31 from a net profit of RM7.88mil in the same period a year ago.

Its performance was weighed down by a non-cash impairment loss amounting to RM266.15mil on its property, plant and equipment.

In a filing with Bursa Malaysia, Hiap Teck said this had caused its share of loss in a jointly-controlled entity to rise to RM154.99mil in the current quarter from RM27.16mil in the fourth quarter of financial year 2016 (FY16).

Therefore, in total, Hiap Teck posted a pre-tax loss of RM139.42mil from a pre-tax profit of RM17.79mil a year ago.

Revenue was down 12.38% to RM228.28mil from RM260.54mil, dragged by a lower sales volume due to the festive season.

The weaker performance translated to a loss per share of 10.65 sen from an earnings per share of 0.61 sen previously.

For FY17, Hiap Teck saw a net loss of RM102.98mil from RM41.56mil a year ago. This was incurred on a lower revenue of RM1.07bil from RM1.14bil previously.

On its prospects, the company said it would continue to focus on improving manufacturing efficiency, procurement and working capital management.

“The group will stay agile to enhance technical capabilities and expand its product range to remain at the forefront of the steel industry in Malaysia,” Hiap Teck said.

The company noted that China had continued with its plan to reduce production capacity while steel prices across the world had surged.

This has benefitted steel players and is a marked improvement from the earlier years of depressed prices due to the influx of cheap imports.

Locally, the steel consumption growth rate was maintained at 2.6% to 10.30 million tonnes in 2016.

Hiap Teck shares closed down one sen or 2.3% to 43 sen yesterday, with 13.46 million shares being traded. At this price, the company is worth RM556.91mil.