See Hup Seng second-quarter net profit surges 79% to S$2.8m

Both core businesses posted revenue spikes.

See Hup Seng Limited (See Hup Seng) reported that its earnings for the second quarter ended 30 June 2013 (2Q13) soared 79% to S$2.8 million from S$1.5 million in 2Q12. This came on the back of a 20% increase in Group revenue to S$75.9 million compared to S$63.3 million in 2Q12, and an expansion of gross profit (GP) margin to 15.4% from 15.0% previously.

Higher sales and net profits from both core businesses – Refined Petroleum (RP) and Corrosion Prevention (CP) – contributed to the sterling growth of the Group’s top- and bottom-lines in 2Q13.

The Group’s net profit for the six months ended 30 June 2013 (“1H13”) also surged 67% to S$4.9 million from S$2.9 million in 1H12. Group revenue climbed 19% to S$146.1 million in 1H13 from S$123.2 million in 1H12. As a percentage of Group revenue, RP accounted for 84% while CP contributed 14% in 1H13.

At the end of June 2013, the Group maintained a sound financial position with cash and cash equivalents of S$35.3 million. Its net gearing stood at 0.45 times.

Executive Chairman of See Hup Seng, Mr Thomas Lim said, “The Group’s operating results in the first half of 2013 have been encouraging. This was underpinned by our RP and CP businesses which achieved profitable growth over two consecutive quarters amid challenging market conditions. In 2Q13, RP business saw its net profit increasing by 50% while CP business’ profit more than doubled from the same period last year.

As the macro-economy continues to face a slow and uncertain recovery, the Group remains cautious on its business outlook for the second half of 2013. Intense competition and rising business costs are some of the challenges that we have to continue managing while keeping our sights on demand opportunities.”

Barring any unforeseen circumstances, the Group expects to deliver a profitable performance in FY2013. “We have an experienced management and operations teams in place to navigate and execute the business initiatives of our RP and CP operations, which remain as the Group’s core business pillars. Backed by a sound financial position, we will also continue to assess potential acquisitive or collaborative prospects, as and when they arise, which can enhance the Group’s longterm value,” Mr Lim added.

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