SINGAPORE - Falling consumer product sales battered profits at Hong Leong Asia, the trade and industrial arm of Hong Leong Group.
Net profit for the three months to June 30 plunged 93.4 per cent relative to the corresponding period last year, to $638,000.
Revenue rose 1 per cent to $1.2 billion.
Profits fell mainly due to the higher losses suffered by the consumer products business, Hong Leong said. This was partially offset by higher profit from the diesel engines business, it said.
Consumer product sales fell 18.7 per cent from last year. They were affected by the weaker Chinese home appliance market and economy, it said. This was further exacerbated by keen competition and over capacity in the industry, it also said.
Revenue from the diesel engines business, however, rose S$30 million compared to last year. Although the total number of engines sold declined, revenue increased mainly due to more expensive engines being sold and the yuan strengthening during the quarter, the company said.
Hong Leong Asia's revenue increased relative to last year due to higher revenue from the diesel engines business and building materials business. This however, was offset by lower revenue from the consumer products business, the company said.
Earnings per share fell to 0.17 cents from 2.57 cents last year.
Net asset value rose to 232.41 cents from 231.98 cents at December 31 last year.
The company declared an interim dividend of one cent per ordinary share, the same as last year.
The company said it expected a weaker performance in the near term from its business units, especially from the majority of its businesses in China,.
It said it would continue to monitor market conditions closely to mitigate adverse effects, exercise cost discipline, and strengthen its financial position through better working capital .