Heng Hup Holdings Limited Issues Significant Profit Warning for FY2025

Key Highlights

• The Board of Heng Hup Holdings Limited has issued a profit warning for the financial year ended 31 December 2025 (FYE 2025).
• The Group expects a decrease in consolidated profit attributable to shareholders of approximately 40% to 50% compared to the previous year (FYE 2024).
• The primary reason for the profit decline is a drop in average selling prices of scrap ferrous metals, which has led to a reduction in revenue.
• Despite lower procurement costs and a slight improvement in gross profit margin, these factors do not offset the impact of the lower revenue base.
• There has been a significant increase in transportation costs, further affecting overall profitability.
• The results for FYE 2025 are preliminary and unaudited; final figures may be subject to adjustments.

Detailed Analysis

Heng Hup Holdings Limited, an established player in the scrap ferrous metals market, has announced a substantial decline in its expected consolidated profit for FYE 2025. According to the Board’s preliminary review of unaudited consolidated management accounts, profit attributable to the owners is anticipated to be 40% to 50% lower than the previous financial year.

The decline is primarily driven by a drop in average selling prices of scrap ferrous metals. This market trend has led to a corresponding decrease in the Group’s revenue for the year. Although the Group managed to reduce its cost of goods sold, largely due to lower procurement costs in sync with market prices, and saw a slight improvement in gross profit margin, these positive developments were insufficient to counteract the larger issue of a reduced revenue base.

Additionally, the Group faced a significant rise in transportation costs. This escalation in logistics expenses further eroded profitability, compounding the challenges posed by lower sales prices and revenue.

As a result, shareholders and potential investors should be aware that the Group’s financial performance for FYE 2025 is likely to be much weaker than the previous year. The Board has emphasized that the current figures are based on preliminary data and have not been audited or reviewed by the external auditor. Actual results may differ once the annual results are finalized.

Implications for Shareholders

• This profit warning is material and price sensitive. Investors should expect increased volatility in the Company’s share price as the market digests the news of a 40%-50% profit decline.
• The reduction in profitability, driven by market conditions and cost escalations, may affect future dividends, capital expenditure, and strategic direction.
• The Board advises shareholders and potential investors to exercise caution when dealing in the Company’s shares.

Corporate Governance

The announcement was made by Datuk Sia Kok Chin, Chairman and Chief Executive Officer, on behalf of the Board. The Board comprises both executive and independent non-executive Directors, underscoring the Company’s commitment to transparency and corporate governance.

Disclaimer

Disclaimer: This article is based on Heng Hup Holdings Limited’s official profit warning announcement for FYE 2025. The information herein is derived from preliminary, unaudited management accounts and may be subject to change. Investors should consult professional financial advisors and consider their own circumstances before making investment decisions. The article does not constitute financial advice or a recommendation to buy or sell the Company’s shares.

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