Hong Leong Asia (H22) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 5.2% to S$4,081.5M; net profit increased 16.9% to S$119.9M and shareholder-attributable profit rose 19.0% to S$64.9M.

• Excluding one-off disposal gains in both years, shareholder-attributable profit grew 32.3%; higher margins and improved joint-venture and associate contributions supported growth, partly offset by weaker forex translation and higher finance costs.

• H2 revenue grew 12.4% to S$2,006.4M; net profit excluding discontinued operations rose 44.0% to S$55.8M.

Financial highlights

• FY2023 net profit excluding discontinued operations was S$120.1M, up 16.7%; EPS rose 18.9% to 8.67 cents.

• H2 shareholder-attributable profit and EPS each increased 185.0% YoY, to S$34.1M and 4.56 cents, respectively.

• H2 operating cash flow was S$362.0M versus S$37.6M; FY2023 free cash flow was S$261.6M versus an outflow of S$112.3M.

• FY2023 net cash under the loans-and-borrowings definition was S$346M versus S$143M; including specified trade liabilities and excluding receivables, it was S$252M versus S$33M.

• H2 dividends per share were 2.00 cents, unchanged YoY; FY dividends per share were 1.75 cents in 2023 and 1.81 cents in 2022.

Segment performance

• Powertrain Solutions revenue rose 4.3% to S$3,403.5M and profit after tax increased 14.1% to S$76.5M; engine sales fell 2.4% to 313,493 units, with H2 volume up 5.2%.

• Powertrain earnings benefited from higher selling prices and gross margins, cost reductions, improved marine and power-generation mix, and stronger joint-venture performance.

• Building Materials revenue increased 11.1% to S$650.6M and profit after tax rose 67.2% to S$76.3M; higher Malaysian volumes and selling prices supported results.

• Rigid Packaging revenue fell 16.7% to S$21.5M and recorded a S$2.2M loss after tax, versus S$8.2M profit in FY2022; Corporate and Others’ loss widened 69.9% to S$30.5M.