Lee: ‘Our current property offerings, including the Aria KLCC, have seen encouraging take-up rates in spite of the slowdown in demand for high-end developments.’
KUALA LUMPUR: Hap Seng Consolidated Bhd expects its tile manufacturing unit to significantly boost revenue of the company’s building materials division this year.
“Given the full-year contribution from Malaysian Mosaics, we can expect to see the revenue of the division to grow further,” group managing director Datuk Edward Lee Ming Foo (pic) said.
The division had contributed about a quarter of the group’s total sales.
Last year, Hap Seng’s building materials division registered a total revenue of RM1.3bil. The company completed the acquisition of Malaysian Mosaics Sdn Bhd in the middle of last year.
“As for the building materials division, we are fully-integrated as we are involved in the entire supply chain,” he told reporters after the company’s AGM yesterday.
Hap Seng acquired Malaysian Mosaics from Gek Poh (Holdings) Sdn Bhd for RM380mil. The firm is principally involved in the manufacturing and trading of mosaics and ceramic tiles.
Last year, Hap Seng’s building materials division was the single largest top line contributor to the group, representing 26% of Hap Seng’s total revenue.
Lee also said that Hap Seng had breached the RM1bil after-tax profit benchmark for the first time in the financial year 2016 which saw 82.3% of Hap Seng’s top line being contributed by its domestic operations.
Under its property investment and development division, Hap Seng has new launches worth RM1.86bil in gross development value this year. Its total land bank stood at 3,105 acres.
“We continue to see demand for developments in prime and strategic locations that provides good value preposition to buyers. Our current property offerings, including the Aria KLCC, have seen encouraging take-up rates in spite of the slowdown in demand for high-end developments,” said Lee.
On its plantations division, Lee also indicated that Hap Seng is looking at expanding its plantation acreage, particularly in Sabah. Apart from that, he added that the process of constructing the division’s second biogas plant has already begun. It is expected to be completed in three years.
The Main Market-listed Hap Seng recorded a 10.2% year-on-year (y-o-y) increase in bottom line attributable to shareholders to RM1bil for the financial ended Dec 31, 2016. This was on the back of its higher full-year revenue which rose by 11.3% y-o-y to RM4.89bil, primarily attributed to higher contributions from most of Hap Seng’s existing busineses and the inclusion of the results from Malaysian Mosaics.
Moving forward, the group is optimistic of registering a commendable performance, despite the soft market conditions.
“The group will continue to focus on our core businesses in 2017 and explore opportunities to further growth,” said Lee, adding that Hap Seng is well-equipped to meet any future challenges.
