Hiap Seng profit up 70.3% to S$3.6mn

Healthy balance sheet with cash and cash equivalents of S$51.5 million on revenue of S$44.6mn FOR 2QFY2012.

Hiap Seng Engineering Ltd (“Hiap Seng”), a specialist integrated engineering group for the oil-and-gas, petrochemical and pharmaceutical industries, on Tuesday reported a 70.3% rise in net profit attributable to shareholders to S$3.6 million, notwithstanding lower revenue of S$44.6 million for the three months ended September 30, 2011 (“2QFY2012”).

The increase in net profit attributable to shareholders, from S$2.1 million in 2QFY2011 to S$3.6 million in 2QFY2012 was mainly due to a higher gross profit margin as well as a foreign exchange gain of S$1.3 million arising from the recovery of the US Dollar against the Singapore Dollar during the period under review.

Revenue for 2QFY2012, however, decreased 21.1% from S$56.4 million in 2QFY2011 to S$44.6 million in 2QFY2012, mainly due to lower recognition of project revenue in 2QFY2012.

For 1HFY2012, the Group’s revenue decreased 31.3% from S$124.3 million in 1HFY2011 to S$85.4 million in 1HFY2012 and correspondingly, net profit attributable to shareholders decreased by 39.7% from S$10.2 million to S$6.1 million.

Mr Frankie Tan, Chairman and CEO of Hiap Seng said, “The outlook for the oil-andgas and petrochemical industries continues to remain positive, buoyed by fast growing Asian demand. Major market players continue to break ground on existing projects and are expanding their operations in the region, committing significant investments in new projects. We will continue to maintain a vigilant watch on our cost structure while capitalising on new growth opportunities.”

As at November 8, 2011 the Group’s order book stands at S$205 million, according to a Hiap Seng report.

As at September 30, 2011, the Group had cash and cash equivalents of S$51.5 million, as compared to S$44.3 million as at March 31, 2011.

To reward its shareholders, the Group has declared an interim, one-tier tax-exempt dividend of 1.0 cent per ordinary share, which is expected to be paid on January 18, 2012.

While the outlook for the oil-and-gas and petrochemical industries continues to remain positive, global economic uncertainties remain, together with keen competition and rising costs. The Directors of the Company are cautiously optimistic about the Group’s performance for the current financial year ending March 31, 2012.