Sluggish sales drag HupSteel's Q4 net profit down by 46%

HupSteel's full year fourth quarter net profit fell by 46 per cent to $968,000.

Revenue for the three months to June 30 decreased by 41 per cent to $32.9 million.

This was mainly due to a sharp decline in the export sale of steel products to the marine sector arising from a sluggish demand in the light of uncertain global economic conditions.

Despite the lower volume achieved, the group was able to achieve better gross profit margin of 16.4 per cent compared with 12.5 per cent in the same period last year, as there were more project sales last year that fetched lower margin.

Earnings per share shrank to 0.16 cent from 0.29 cent previously while net asset value per share fell by 0.64 cent to 32.44 cents.

For the full year, net profit fell by 65 per cent to $2.5 million.

Looking ahead, HupSteel expects demand for pipes and fittings to remain stable in the near term. It will continue to face pricing pressure due to stiff competition.

In the coming quarters, the group expects to face stiff competition in the construction sector for structural steel products while demand for such products to remain weak from the marine sector.

An unchanged final dividend of half a cent was recommended.