SINGAPORE - Hong Leong Asia has narrowed its third quarter net loss to $13.9 million from $16.7 million in the corresponding period last year.
Revenue shrank by 9.5 per cent to $829.8 million for the three months ended Sept 30.
The decrease was mainly due to the slowing economic growth in China which affected Xinfei and Yuchai, its consumer products unit and diesel engines unit, respectively.
In addition, the competition for building materials supply also intensified.
The bottomline loss was due mainly to the continuing losses incurred by Xinfei, owing to declining revenue and margins.
Profits from Yuchai and the building materials supply unit were lower and insufficient to offset the loss incurred by Xinfei.
Xinfei's revenue declined by $4.6 million or 4.4 per cent, due to the weakening demand for fridges and freezers and competition within the white goods industry in China.
Xinfei's total unit sales for the quarter was 7.5 per cent higher than the same period last year.
Yuchai's revenue declined by $54 million or 8.2 per cent. Units of engines sold declined by 21.6 per cent.
The transition to Tier 3 emission standards in the off-road segment affected the agriculture engines sales, which recorded a decline. Although bus sales decreased, the overall on-road segment performed slightly better than last year. Yuchai's marine sales also increased.
Loss per share improved to 3.72 cents from 4.48 cents previously while net asset value per share fell to 193.91 cents compared to 209.34 cents as at Dec 31.
On its prospects, Hong Leong Asia noted that Yuchai continues to operate in a competitive environment in the commercial vehicles market, which is affected by slower economic growth in China, transition in emission standards and government policies.
The bus segment was affected by the competition from full electric buses. The truck segment recorded slight recovery.
Xinfei, which operates in the consumer and home appliance products industry in China, is facing intense price competition and overcapacity.
The market is expected to continue to be weak, and it will impact Xinfei's performance and recovery.
Overall, the group's performance is expected to be weak for the rest of the year.