Heng Hup Holdings Limited (01891) said the company expects a significant decline in the profit attributable to owners of the company for the year ended 31 December 2019 by not less than 50% as compared to the profit for the corresponding period in 2018.
This was mainly due to (i) the tightening in the gross margin for the scrap ferrous metal trading business as experienced from July 2019 onwards, resulted from the declining procurement price offered by our customers in response to the general price decrease in steel products, together with higher buying prices in sourcing supplies driven by the growing competition amongst scrap metal traders; the increase in transportation costs for engaging external logistics companies to cope with the growing demands of scrap ferrous metal from a new customer located in the state of Pahang, the east coast of Peninsular Malaysia for the purpose of expanding the customer base; and (iii) the absence of one-off gain of RM9.3 million on the disposal of assets classified as held for sale recognised in the year ended 31 December 2018.
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