HIB records revenue of RM937 million for FYE2023 with net profits of RM56.5 million

KUALA LUMPUR: Hextar Industries Berhad (HIB) registered a cumulative consolidated revenue of RM937 million for the financial year ended Dec 31, 2023 (FYE2023). On the back of this, the Group achieved a consolidated net profit for FYE2023 of RM42.1 million.

Net profits for the year were impacted by an impairment of goodwill of RM14.4 million, resulting in net profits reducing from RM56.5 million to RM42.1 million.

HIB posted a lower quarterly consolidated revenue of RM166 million for the fourth quarter ended Dec 31, 2023 (4Q2023) compared to the preceding quarter mainly due to lower average selling prices and lower volume of fertilisers delivered due to the monsoon season. Coupled with the impairment of goodwill, HIB reported a consolidated net loss of RM12.7 million in 4Q2023.

The company had previously recorded goodwill on the acquisition of its outdoor equipment rental business. This was partially written down as a result of the impact of the Covid-19 pandemic and the movement control orders on the business. However, whilst the business has returned to profitability, the sector has only seen marginal expansion. Management has thus decided to impair the remaining balance of goodwill of RM14.4million in the current financial year.

In 2022, the company changed its financial year end from 31 August 31, to December 31. As such, there is no comparative figures for the corresponding period of the previous financial year.

Group managing director Benny Ang said that “notwithstanding the challenges faced by the Group during the quarter such as the weakening of the ringgit and softening of fertiliser prices in the global market, our performance remains commendable and we would have made a net profit ofRM1.7 million if not for the goodwill impairment. The goodwill impairment arose from the acquisition of the equipment rental business back in 2018 and is solely an accounting entry and a non-cash item. As it has no impact on our business performance, we decided to charge out the remaining goodwill in our books as a one-off impairment in order for our balance sheet to be more reflective of HIB Group’s net asset value moving forward. With the anticipated improvement in sales volumes of fertilisers following the end of the monsoon season, we are optimistic on our financial performance in the coming quarters.”

In respect of the Industrial and Consumer segment, Alex Sham the executive director, said “This segment has turned around in 4Q2023 and achieved a net profit of RM2.1 million from a net loss of RM0.2 million reported in the preceding quarter. This is mainly due higher sales from the heavy equipment and equipment rental businesses, together with the inclusion of the newly acquired subsidiaries ie. Pacific Office (M) Sdn Bhd and Hextar Mitai Sdn. Bhd. These are established companies with profitable operations and we look forward to consolidating their full year results in financial year ending 2024.”

Regarding the application to the Securities Commission in relation to the transfer to the Main Market of Bursa Malaysia Securities Bhd (Main Board), Benny informed that “the application is progressing smoothly and we hope to be able to announce some positive news in the coming weeks.”

The company has proposed a second interim single-tier dividend of one sen per ordinary share in respect of financial year ended Dec 31, 2023 on the back of its strong financial result.