KUALA LUMPUR: Sarawak-based infrastructure specialist Hock Seng Lee Bhd (HSL) has reported its best quarterly results, posting a 40.64% year-on-year (y-o-y) rise in net profit to a record of RM15.47 million in its third quarter (3Q) ended Sept 30, 2009, driven by its projects in Sarawak.

It also posted a record revenue that rose 27.74% to RM101.73 million y-o-y. Earnings per share increased to 2.81 sen from 1.99 sen. No interim dividend was declared.

“We are privileged to participate in the accelerating development in Sarawak. We have had a very productive quarter, with our wastewater project in Kuching in full swing and many road and building construction projects also progressing well.

“With the economic stimulus packages and the Sarawak Corridor for Renewable Energy projects flowing down to the tendering stage, we are hopeful of further opportunities that draw on our infrastructure expertise,” HSL group chairman Datuk Idris Buang said in a statement yesterday.

As at end-September, the company had RM1.8 billion worth of projects in hand, with RM1.25 billion unbilled, the statement said.

For the Kuching wastewater project, HSL and its consortium partners were awarded the first phase, which involves laying the main sewer line, commissioning the plant and providing connections to commercial and residential properties in the central business district and its surroundings. HSL began working on the project in October 2008.

HSL group managing director Datuk Paul Yu Chee Hoe said by mastering the technology of trenchless pipe installation, the group was positioning itself for further opportunities in the subsequent phases of the sewerage project, which was expected to involve three more phases. HSL said the four phases were estimated to cost RM2 billion.

“For this reason we have invested in high-tech tunnel-boring machines (TBM). Using these to lay the main sewer lines creates minimal disruption to the public,” Yu added.

Meanwhile, its other contracts in progress include roadworks in Kuching, reclamation and infrastructure works in Samarahan, Kuching and Tanjung Manis and various building construction works for educational institutions and affordable housing in Kuching and Bintulu, the statement said.

Its property arm, Hock Seng Lee Construction Sdn Bhd, recently launched its inaugural guarded and gated estate called  The Leaf, which has a gross development value of RM33 million.

It saw a 70% take-up during its launch week, while its other property development projects such as Lavender Hills and Samariang Aman had been “virtually sold out”.

For the nine months to Sept 30, 2009, HSL’s net profit rose 25.6% to RM38.69 million from a year earlier, while revenue grew 18.05% to RM261.71 million. EPS rose to 7.04 sen from 5.56 sen.

Yu also said despite considerable capital expenditure for the Kuching sewerage project, HSL had paid out an interim dividend of 5%, or one sen less tax, on Oct 8 totalling RM4.12 million. He said shareholders could expect a good yield in FY09.


This article appeared in The Edge Financial Daily, November 20, 2009.