Hai Leck profit up 11% to $10.0mln

Attributes growth of profit, revenue for 9 months to solid top-line growth and disciplined expense control.

Mainboard-listed Hai Leck Holdings Limited (Hai Leck) announced a net profit after tax of S$10.0 million for the nine months ended 31 March 2010, up 11% over the S$8.9 million it achieved in the previous corresponding period.

For the nine months under review, the Group recorded revenue of S$104.5 million, an increase of 43% or S$31.5 million from S$73.0 million it achieved in the previous corresponding period. The increase is due mainly to higher revenue from Project services from ongoing infrastructure construction projects that were mostly contracted in 2008 and 2009.

On a quarter-on-quarter basis, revenue rose by 31% or S$8.6 million to reach S$35.9 million compared to S$27.3 million it attained in the previous corresponding quarter, largely due to higher revenue from Project services.

Mr. Cheng Buck Poh, Hai Leck's Executive Chairman, said the Group's financial performance is satisfactory overall, consistent with the Group's expectations. "We achieved a good set of financial and operational results. Our solid top-line growth, together with disciplined expense control, was vital in generating a strong net cash position from operations."

The Group is busy working on several ongoing projects, including maintenance contracts from Shell Eastern Petroleum (Pte) Ltd and Shell Chemicals Seraya (Pte) Ltd to undertake scaffolding, hot and cold insulation and painting works and refractory services at the Pulau Bukom and Jurong Island plants.

On the whole, the Company is in good shape financially with a market capitalisation of
S$102.4 million -- based on yesterday’s closing price of 31.5 cents -- backed by total assets of S$113.0 million and net assets of S$79.4 million as at 31 March 2010. Net asset value per share was 24.4 cents, up 10% or 2.4 cents from 30 June 2009.
Its cash position continues its uptrend with net cash balance of S$35.3 million at the end of March 2010, an increase of 95% over the previous corresponding period. Net cash flow generated from operations also increased for the period, standing at S$24.2 million against S$15.0 million the previous year.

In line with the gradual turnaround in the global economy, capital expenditure activities in the Oil & Gas sectors, both globally and in the region, are expected to increase.

Amidst this positive backdrop, the long-term industry fundamentals in the Oil & Gas industry remain robust and this spells continuing bright prospects for the Group over the longer period.

Going forward, the Group's strategic focus will continue to be growing its core businesses in Project and Maintenance services by leveraging its strong track record and established market reputation.