Hong Leong Industries 3Q net profit narrows 37%, declares 35 sen dividend

KUALA LUMPUR (May 25): Hong Leong Industries Bhd’s net profit for the third quarter ended March 31, 2022 (3QFY22) decreased by 36.86% to RM63.83 million, from RM101.08 million a year ago.

Earnings per share retreated to 20.30 sen from 32.16 sen, according to the group’s filing on Wednesday (May 25). Hong Leong Industries is involved in the manufacture and distribution of motorcycles, spare parts and ceramic tiles.

The group attributed the drop in profit mainly to the drop in its quarterly revenue as a result of supply chain disruptions, which affected production and sales of its motorcycle business.

Quarterly revenue slipped 14.84% to RM635.24 million in the quarter under review, as compared to RM745.96 million in 3QFY21.

The group has declared a second interim dividend of 35 sen per share with an ex-date of June 9, 2022, to be paid on June 23.

For the cumulative nine-month period (9MFY22), Hong Leong Industries posted a 45.14% drop in its net profit to RM138.26 million from RM252.04 million; while its cumulative revenue slipped 22.13% to RM1.69 billion, as compared to RM2.17 billion.

It attributed the lower profit and revenue to lower sales during 1QFY22 due to the Movement Control Order (MCO) which was enforced in that period and in turn curtailed production for two months.

On its prospects, Hong Leong Industries noted that supply chain disruption, as well as rising costs of material and energy remain major challenges that affect its manufacturing operations.

However, the group said it will continue to manage its plant’s efficiency, reduce costs and develop new products to overcome the aforesaid challenges.

“The board expects the group’s performance for the financial year ending June 30, 2022 (FY22) to be satisfactory,” it added.

Hong Leong Industries finished down five sen or 0.55% to RM8.99 on Wednesday, giving it a market capitalisation of RM2.95 billion.