HSS Engineers’ 3Q22 net profit catapults to RM5 million
HSS Engineers Bhd’s (HSS Engineers) net profit for the third quarter ended September 30, 2022 (3Q22) has catapulted to RM5 million from RM0.2 million for 3Q21 on stronger contributions from the Project Management Consultancy (PMC) segment.
This was on the back of stable 3Q22 revenue of RM40.4 million compared to RM42.9 million in the previous corresponding quarter.
The group recorded maiden contributions from works for Mass Rapid Transit 3 (MRT3) as PMC since August 2022.
Together with PMC works for Pan Borneo Highway Sabah Phase 1A, the segment’s revenue rose 38.6 per cent to RM13.2 million from RM9.5 million a year ago.
Revenue from the Engineering services segment amounted to RM24.6 million in 3Q22 versus RM31.2 million previously in line with project progress.
For the nine months ended September 30, 2022, the group’s net profit more than doubled to RM11.5 million compared to RM3.8 million previously on favourable product mix, although revenue declined to RM114.7 million from RM125.8 million a year ago.
With the ongoing projects, the group anticipates for its profit uptrend to maintain in the coming quarter with FY22 ending on a steady note.
As at September 30, 2022, the group’s unbilled orderbook amounted to RM1.5 billion, which will be billed over the next eight years.
The orderbook includes projects won during the year, such as PMC for MRT3, consultancy services for Malaysia’s 5G infrastructure and network by Digital Nasional Bhd, upgrading of Sungai Marang bridge in Marang, Terengganu and the extended appointment for water treatment plant upgrade by Kedah State Government.
“With the strong orderbook in hand, we are aggressively expanding our pool of engineers to cater to the higher activities following our recent singlelargest new win, the RM997.9 million MRT3 contract, as well as the various flood mitigations and local infrastructure projects that we are actively involved in,” HSS Engineers executive vice chairman Tan Sri Kuna Sittampalam said.
“We are optimistic of maintaining a significant profit uptrend in FY22 as we continue to make significant strides in our PMC role and peer review for MRT3, waterrelated work packages for the State of Selangor, as well as mission-critical flood mitigation projects across different states in Malaysia.
“Furthermore, having proven our engineering expertise in the country, the group is making great strides in expanding our international footprint for projects across Asean, India and other countries.
“In fact, during the year, we have successfully tied up as preferred partners with reputable Japanese firms to help expedite the rollout of projects funded by Japan International Cooperation Agency (JICA) in developing nations.”
On the overseas front, HSS Engineers recently formed strategic collaborations with Oriental Consultants Global Co Ltd and Yachiyo Engineering Co, Ltd to participate in JICA funded projects.
The collaboration would prioritise activities in the transportation sector (particularly rails and mass transit), water resources and supply management, flood mitigation, as well as roads, highways and bridges.
In addition, the group had established a preferred partnership with Shizen, the overseas arm of the Fukuokabased renewable energy developer Shizen Energy Inc.
This would set the group on the path of establishing its fourth vertical of the recurring revenue stream, as it explores investing into assets that will provide longer-term sight on earnings.
“While we reiterate expertise in urban transport through current undertakings, we are also establishing building blocks into emerging sectors such as renewable energy, as shown by our partnership with Shizen.
“The partnerships are aligned with the group’s stance of becoming a full-fledged engineering consultancy in core emerging sectors to build our long-term sustainability.”
Japan had reportedly earmarked US$367 billion investments in various infrastructure projects in Southeast Asia under JICA, which is the primary Japanese governmental agency responsible for delivering Japan’s Official Development Assistance program to support socioeconomic development in developing countries across the globe.