Real estate and property developer Hong Lai Huat has recorded a 119% y-o-y jump in revenue from about $5.5 million to $12.1 million for its 1HFY2021 ended June 30.
Gross profit also rose 69.6%, surging from $3.1 million to $5.2 million. However, gross margins fell from 55.1% to 42.7%, and the company recorded a net loss of $1.3 million, slightly lower than the $1.34 million loss in 1HFY2020
In an earnings release, it said the revenue increase was mainly due to an increase in property sales, as Hong Lai Huat recognised the remaining sales of its hotel in its D’Seaview mixed use project in Sihanoukville, Cambodia. In 1H2021, D’Seaview also saw improved collections from its buyers as efforts to market the unsold balance units continued positively.
In a release, the company pointed out that other expenses increased by $3.3 million from $61,000 the year before. This was mainly because of an impairment loss of $3.2 million recognised for the proposed disposal of HLH Agri R&D, announced on 6 June 2021 and was classified as an asset held for sale in 1HFY2021.
If the impairment was excluded, the company will have recorded an earnings turnaround of $1.9 million.
As of 30 June 2021, Hong Lai Huat also reported that it has a net cash position of $10.3 million, boosted by the proceeds from its recent rights issue and positive operating cash flow of $2.3 million generated during 1HFY2021.
Total equity stood at $144.3 million or a net asset value of 27.87 cents per share.
Moving forward, Hong Lai Huat aims to develop a mega Cambodia-Singapore Agricultural Hub, having obtained the official approval to convert its existing agricultural land into a mixed-use development
The hub will feature several key zonings such as food processing factories, solar energy, construction material and aquaculture, and it will seek to partner with several key international players to operate these zonings through a joint investment or joint cooperation model.
The Agriculture Division will also seek joint cooperation partners to operate its cassava starch factory as well as its plantation land moving forward.
Alongside the development of Agri-Hub, the company will also continue with its other property development projects in Cambodia. As of Aug 30, construction for its Royal Platinum joint venture project remains on track and has reached 7 out of the total 28 floors.
In addition, a plot of land that was gained in Sep 2020 by Hong Lai Huat in Phnom Penh is currently in development design, and it said it will monitor the Covid-19 pandemic situation closely before deciding when to launch the project.
Commenting on the results, Hong Lai Huat Group general manager and executive director Ong Jia Jing said “As one of the fastest growing economies in the world with a rising middle income population, Cambodia has always been one of the most attractive property markets in the region, attracting both local and foreign buyers... With the development of Agri-Hub and a portfolio of quality projects including D’Seaview, Royal Platinum as well as the third plot of land …[this will] help to support the growth of the group for years to come.”
Shares of Hong Lai Huat closed flat at 9.5 cents on Aug 30.
