Hong Leong Asia reports $71.3m loss

China's slowing economy continued to weigh on Hong Leong Asia, the trade and industrial arm of Hong Leong Group, and helped send it deeper into the red.

Losses hit $71.3 million in the 12 months to Dec 31, up 17.3 per cent from the $60.7 million deficit recorded in 2015.

Revenue fell 8.8 per cent to $3.7 billion, down from $4.1 billion.

The company recorded declines in sales across its main business units, including diesel engines, building materials and consumer products.

Sales at the diesel engines unit declined 5.6 per cent to $166.4 million compared with 2015. This was attributed to more electric buses replacing diesel engine vehicles.

  • AT A GLANCE

  • FULL-YEAR REVENUE: 
    $3.7 billion (-8.8%)

    FULL-YEAR LOSS: 
    $71.3 million (+17.3%)

    FINAL DIVIDEND: 
    1 cent per share

Revenue at its consumer product unit fell by 12.8 per cent to $54.5 million, due to weakening demand for fridges and freezers in an environment of intense price competition. The business materials division was also hit by the construction slowdown. Revenue slid 20.2 per cent to $117.1 million.

However, the firm kept up with its research and development spending, expanding it by 7.9 per cent to $132.9 million last year. It noted the need to continue investing in new engine models to comply with increasingly stringent emission standards.

Loss per share came to 19.05 cents, up from 16.24 cents for the same period a year earlier, while net asset value per share fell to 186.79 cents as at Dec 31, down from 207.24 cents.

Hong Leong has proposed a first and final dividend of one cent per share, a fall from last year's interim dividend of one cent per share and a final dividend of one cent per share. The firm expects the performance of its business units will be weak in the first half of this year.

A version of this article appeared in the print edition of The Straits Times on March 01, 2017, with the headline 'Hong Leong Asia reports $71.3m loss'. Print Edition | Subscribe