Stronger diesel engine sales accelerate Hong Leong Asia's Q2 earnings

Hong Leong Asia turned in a strong quarter, with a net profit of $9.3 million, up 86.2 per cent from the same period last year.

Revenue for the second quarter ended June 30 was up 9.3 per cent at $1.19 billion.

This was mainly due to higher revenue from the diesel engines unit, offset by lower revenue from the consumer products unit.

The number of diesel engines sold during the quarter rose by 23.6 per cent, mainly due to higher sales volume of agricultural, industrial and truck engines.

A rush to buy diesel engines before the implementation of China IV emission legislation also attributed to the higher sales volume.

Revenue from the consumer products unit declined by 29.2 per cent as it continued to be affected by keen competition and the expiry of rural subsidy incentive programmes which ended in January.

Earnings per share improved to 2.48 cents from 1.33 cents previously.

Net asset value per share grew to 218.9 cents compared 207.06 cents as at Dec 31.

Barring any unforeseen circumstances including any change in policies by the Chinese government and any adverse change in the business climate, Hong Leong Asia expects to remain profitable in the next quarter and in the current year.

An unchanged interim dividend of one cent a share was declared.