See Hup Seng first-quarter profit leaps 53% to S$2.1m

Refined petroleum business gaining revenue steam.

See Hup Seng Limited (See Hup Seng), a provider of corrosion prevention services in Singapore and strategic value-added distributor of petroleum-derived products in Asia Pacific, reported that its earnings for the first quarter ended 31 March 2013 (1Q13) jumped 53% to S$2.1 million from S$1.4 million in 1Q12.

Group revenue in 1Q13 climbed 17% to S$70.2 million compared to S$59.9 million in 1Q12, the company said in a release accompanying its latest quarterly financial results.

"This was led by the Group’s Refined Petroleum (RP) business which recorded a 20% sales increase to make up 85% of Group revenue. The increase in RP business’ revenue more than compensated for the 12% decrease in sales of the Corrosion Prevention (CP) business," See Hup Seng said.

"The RP business also spurred the increase in Group net profit during 1Q13. Thanks to stronger sales and gross profit, RP business’ net profit surged 66% to S$1.3 million from S$0.8 million previously. Notwithstanding weaker revenue, CP business sustained its net profit at S$0.7 million on the back of improved gross profit margin," it added.

At the end of 31 March 2013, the Group had a "sound balance sheet" with cash and cash equivalents of S$30.0 million. Its net gearing stood at 0.4 times.

Said Mr Jimmy Tan, Managing Director of See Hup Seng, “While the Group witnessed an improved financial performance in 1Q13, we remain cautious on the business outlook due to the ongoing macroeconomic uncertainties, intense competition and rising business cost. The RP business chalked up a commendable performance in 1Q13 as we increased our fleet of trucks and capitalised on the demand for industrial and wholesale petroleum-derived products, which was supported by industrial and construction activities in Singapore. Our acquisition of a Singaporebased distributor of petroleum-based products last December also contributed positively to the top-and bottom-line of our RP business in 1Q13.

The CP business delivered steady net profit in spite of a difficult operating environment, especially in the provision of site blasting and coating services due to tighter labour supply in Singapore. Besides driving the growth of our core businesses, we are also assessing suitable acquisitive prospects as and when they arise. Barring any unforeseen circumstances, the Group expects to deliver a profitable performance in FY2013.”