Labour issues, knock-on effects of pandemic hit HSL’s productivity in Q2 2021

Datuk Paul Yu Chee Hoe

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KUCHING, Sept 23: The high Covid-19 case counts in Sarawak recently has, once again, disrupted Hock Seng Lee Berhad (HSL)’s quickened momentum in the first quarter of 2021, due to logistic difficulties, and labour inconsistency and complications.

HSL, in announcing its financial results for the second quarter of 2021 ended June 30, said the Group posted a pretax profit of RM11.9 million from revenues of RM142.79 million where construction activities contributed RM114.48 million and property development accounted for the remaining RM19.5 million.

For the corresponding period in the preceding year, pretax profit was RM5.4 million with revenues of RM83.05 million. In the first quarter of 2021, pretax profit was RM12.23 million from revenues of RM159.5 million.


“Sarawak is experiencing a new wave with daily highs since early July. On Sept 12, 5,291 positive cases were reported in Sarawak, the highest in the country.

“The high infection numbers remain a great challenge in opening up the economy and allowing uninterrupted business operations. It has caused much disruptions, logistic difficulties, and chiefly, human resources complications,” it said in a statement today.

Work at sites are still slower than ideal, necessitating extension of time, just as there are now fewer sub-contractors and specialists to work with.

Managing director Datuk Paul Yu Chee Hoe said the situation has impacted the construction sector’s timetables and productivity greatly whereby on-site works have been hampered and confidence of employers and employees jeopardised.

“There’s a knock-on effect, a chain reaction. Supplies are affected. Both interstate and intrastate transportation are daily issues, resulting in more extensions-of-time needed. This increases costs and narrows profit margins.

“There is now a smaller pool of small and medium enterprises (SMEs) to work with. It’s been 20 months or so since the pandemic. Many SMEs have gone bust. There is a narrower range of subcontractors and specialists to choose from compared to five or 10 years ago.”

Like other labour-intensive industries, there is a serious lack of workforce consistency, and with closed borders plus lengthy procedural constraints, the issue would not be resolved anytime soon, Yu said, noting also the currently high prices of commodities.

In the meantime, HSL is working under strict compliance with standard operating procedures (SOPs) and has not been able to maintain the level of business activities of previous years. Thus, Yu foresees that work will have to be carried out continuously under such challenging circumstances.

HSL’s focus now is to work on replenishing its order book, which is ongoing, while at the same time manage jobs on hand as efficiently as possible given the circumstances. A number of its mega projects including the Miri wastewater project, are almost finished, while the Work Package Seven of Pan Borneo Highway has reached two-thirds complete.

In the property segment, HSL would continue to focus on affordability, giving priority to its Samariang Aman 3 (SA3) that was launched mid last year, where more than half of its units are the more affordable single-storey houses.

HSL will also continue its Rent-To-Own (RTO) campaign for Vista Industrial Park (VIP), which comprises two-storey semi-detached and detached industrial lots near the Sama Jaya High Tech Park.

At its La Promenade Mall, part of HSL’s flagship 200-acre high-end gated community, all tenants are on food delivery platforms and use e-wallet platforms as standard during the no dine-in period.

HSL Tower is the first privately built Green Building Index structure in Sarawak.

The results followed the Group’s 40th Annual General Meeting today at HSL Tower in Kuching. The AGM was originally scheduled for June 18 but postponed following the Movement Control Order.

At the AGM, all resolutions were approved by shareholders and directors who retired by rotation were re-elected. It was seen as a mark of confidence in the present board’s ability to lead the company through the pandemic.

HSL’s Annual General Meeting (AGM) and Board Meeting held in hybrid form with attendees attending in person at HSL Tower or virtually via Zoom.

— DayakDaily