Riding on the Coattail of Strong Demand for Automative Parts, HIL Industries 9MFY22 Net Profit Climbed 14.9%

The one-stop plastic solution provider and property developer’s net profit for the nine months ended 30 September 2022 (9MFY22) rose 14.9% to RM20.5 million, from RM17.9 million previously, on strong demand for automotive parts components from its major customers.  

Earnings per share rose to 6.34 sen from 5.44 sen previously. 

Revenue for the period increased 28.3% to RM125.2 million from RM97.6 million a year earlier, attributed to higher revenue contribution from its manufacturing division. 

HIL Industries’ manufacturing division is involved in plastic injection moulding which produces plastic original equipment manufacturer (OEM) parts mainly for automotive and IT-related products. This division posted solid results for 9MFY22with revenue surging 72.9% to RM85.1 million from RM49.2 million a year ago due to increased orders from its major customers.  

The Company’s major customers include Perodua, Toyota Motor Corp and Honda Motor. It also serves multi-national companies in the electronics, telecommunications, and the IT segments.

For the third quarter ended 30 September 2022 (3QFY22), HIL Industries’ net profit contracted 4.0% to RM7.2 million from RM7.5 million a year ago due to lower revenue contribution from the property division as a result of lower profit recognition for the ongoing project and the delay in the launching of several projects.

Revenue for the quarter rose 16.7% to RM43.5 million from RM37.3 million previously on increased orders for automotive parts components from its major customers. 

As at 30 September 2022, its net cash position stood at RM122.0 million after deducting borrowings of RM91,000, with net assets of RM1.24 per share.

“The surge in new vehicles bookings before the end of the sales and service tax exemption for new vehicles coupled with launches of several new car models by its major customers have lifted the Company’s manufacturing business,” Dato’ Milton Ng, Managing Director of HIL Industries said.

“The manufacturing division is expected to continue to do well with the existing backlog of orders of cars which is expected to last until late 2023. We are fortunate that most of our main customers’ orders have not been severely affected by the worldwide shortage of components,” he added. 

“Whilst labour shortage is still an issue for most industries, with the opening up by our government of the hiring of foreign workers, this bodes well for the economy including the manufacturing sector where we expect this labour shortage to be alleviated in the very near future.”

“At the same time, we have also secured additional businesses from our existing customers and we expect to grow our business with the upcoming launch of several new models in the upcoming months,” he further added. 

Looking ahead, Dato’ Milton anticipates the manufacturing division will continue to be the main revenue contributor to the Group in FY22. 

As for the property division, the Company still expects healthy contributions from the on-going Amverton Links Phase 2 and sale of the completed Amverton Greens project in Bukit Kemuning. 

HIL Industries had in September done a soft launch for 100 units of townhouses namely Garden Homes at Amverton Links in Klang. The “build first, then sell” concept project is expected to contribute RM43.0 million in sales. 

HIL Industries is also targeting to launch property developments with a gross development value of RM275.7 million by first quarter of 2023. 

Among the projects it will be launching are 154 units of stratified double-storey terrace houses in Sungai Buloh and 141 units stratified bungalows in Amverton Cove, Carey Island.

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