SINGAPORE - HG Metal Manufacturing, Singapore's only steel supplier with manufacturing capabilities, expects sales to rise nearly 40 per cent by the year ended Sept 30, 2009, underpinned by a boom in construction and shipbuilding.
HG Metal - which sells steel plates to shipbuilders and makes the pipes and lip channels used for railings and industrial roofing support - on Thursday said net profit in the 2006 financial year nearly trebled to $13.7 million (US$8.8 million) on revenues of $362.8 million.
'We are aiming for a target of $500 million in sales by or before 2009,' HG Metal's chief executive officer Wee Piew said in an interview on Friday. Mr Wee said he expects demand for steel to increase, as the construction sector secures more projects ahead of Singapore's two planned casinos, and the surge in new shipbuilding orders continues.
Singapore accounts for 50 per cent of the firm's total revenue, while the rest comes from other Southeast Asian countries, including Malaysia and Indonesia. Mr Wee also said that the firm is trying to expand its manufacturing operations and lower its dependence on steel trading, which now accounts for 90 per cent of its overall business.
Shares in HG Metal - which has a market cap of $55 million - trade at a forecast price-earnings ratio (PER) of about 8.8 times, comparable with the sector average of 10.6 times. -- REUTERS
