SINGAPORE (May 9): Hong Lai Huat (HLH) Group announced earnings of $4.2 million for 1Q18, unchanged from a year ago despite tripled revenue, due to higher expenses.
Group revenue rose threefold to $16.8 million compared to $5.5 million a year ago on the back of stronger property sales at the group’s signature D’Seaview project development in Sihanoukville, Cambodia.
The property segment contributed the bulk, or 93%, of HLH’s revenue in 1Q18.
In line with the revenue growth, cost of sales tripled to $7.8 million from $2.6 million
Other income however fell to $0.1 million from $3 million in 1Q17.
Administrative expenses doubled to $3.1 million as compared to $1.5 million previously due to depreciation and sales commission payments as well as a lump sum tax.
The group also booked other expenses of $1.1 million compared to none in 1Q17 due to an unrealised exchange loss.
Moving forward, HLH says it will continue to explore meaningful collaboration opportunities to optimise its cassava and starch production techniques and capabilities, as well as pursue divestments of its agricultural assets in Cambodia, which is in line with the Group’s rationalisation strategy.
“We are pleased with the Group’s strong performance in 1Q18. D’Seaview has performed admirably, drawing a lot of interest from both local and foreign buyers. This validates our strategy of delivering quality developments at reasonable prices, and is indicative of the overall strength and potential of the Cambodian property segment, which we continue to be very positive on,” says Johnny Ong, executive deputy chairman and CEO of the group.
Shares in HLH closed 16.7% lower at half a cent on Tuesday.