KUCHING: Hock Seng Lee Bhd (HSL), which chalked up stronger earnings last year, expects the trend in the increase in construction activities that has benefitted the company, to continue going forward.
The marine engineering and infrastructure firm said the Sarawak government’s newly rolled out mega sized infrastructure projects offer new contract opportunities for the group.
These projects include the Sarawak coastal road and second trunk road as well as water works projects.
HSL noted that these new projects are currently mostly in the tendering stage after pre-qualification of contractors.
“Project procurement is undertaken in line with our prudent project management strategies, taking due consideration of the capacity, capabilities and competitive advantages of the group,” added HSL as it released the company’s latest quarterly and financial year results.
In financial year ended Dec 31, 2018 (FY2018), HSL group revenue surged by 45 percent to about RM610.4 million from RM420 million in FY2017 while net profit rose to RM53.7 million from RM47.6 million during the same period.
HSL board has recommended a final single tier dividend of 1.4 sen per ordinary share, pending approval at the upcoming company AGM. This brings to total 2.4sen dividend for FY2018.
Managing director Datuk Paul Yu said the group’s strong financial results were all the more commendable in the face of volatile commodity prices, variation in fiscal policies, wage hike and increased competition.
“HSL has displayed its renowned resilience in what was a tumultuous year for the construction industry,” he added in a press release yesterday.
HSL’s order book has increased to RM3.1 billion currently from RM2.9 billion in FY2018. Of this, RM2.2 billion is unbilled. “The group will be busy on work execution.”
The company currently has 17 on-going contracts, including new property development launches. The new contracts include construction works for Petronas’ latest training centre and packages for infrastructure related to Sarawak Energy Bhd’s Matang substation.
The Miri wastewater project, accompany to the company, is on schedule for mid-2021 completion date, with some tunnel boring operations running around the clock.
The Kuching city wastewater management system (package 2) contract is scheduled to complete in 2023.HSL is also involved in the Pan Borneo Highway project, and its work package has pick up momentum for scheduled completion in 2021.
Last year, HSL successfully completed and handed over three projects in the Sarawak Corridor of Renewable Energy (SCORE).These are the Samalaju Boulevard package 1, the road into Samalaju Industrial Park from Tg Kidurong and works for the substation establishment, also at Samalaju.
Yu said HSL would capitalise on the upcoming opportunities like the coastal and trunk road projects as “they suit our capabilities.”
On the group’s property development which contributed 18 percent to the group bottomline in FY2018, Yu said its property arm Hock Seng Lee Construction Sdn Bhd had RM240 million worth of projects on going.
He said another RM160 million worth of new property projects would be launched this year. These include HSL’s flagship mixed development La Promenade’s remaining 56 units of super-link homes for Precinct L:uxe and 25 units of three-storey bungalows and duplexes for Precinct Grande.
The residential estates of Samariang Aman 2 and Highfields 3B in Kuching will also have new residential phases come on into the market.
The group completed some RM92 million worth of property projects last year, comprising mostly the Eden Commercial Centre shophouses and industrial building for Vista Industrial Park Block 1.
The La Promenade along Kuching-Samarahan highway is expected to see the completion of its mall and HSL’s high-rise office headquarters this year.
