SINGAPORE (Apr 10): Singapore’s construction sector looks likely to streak ahead in 2018, on the back of the en bloc fever and a rise mega infrastructure projects. And this ground engineering solutions provider is hoping the rise in demand for its services can lift it out of the doldrums.
Foundation and geotechnical engineering specialist CSC Holdings has been plagued by losses for the past four consecutive years.
From FY15 to FY17, CSC posted full-year losses of $16.7 million, $6.9 million, and $25.6 million, respectively.
For the first nine months of FY18, the company has chalked up losses of $8.5 million, despite a 41.2% surge in revenue to $264.8 million.
Now, CIMB Research says CSC is “upbeat on [a] turnaround” this year.
“CSC’s management is optimistic about demand prospects this year, partially due to the slew of en bloc projects that are expected to launch soon,” says CIMB analyst Colin Tan in an unrated report on Monday.
According to Tan, CSC also believes that the upcoming Punggol Digital District could offer a package involving foundation works up for tender that could potentially be more than $200 million.
Meanwhile, he notes other potential upcoming sizeable prospects for CSC, including Tuas Mega Port and the relocation of Paya Lebar Airport.
“CSC believes that more contracts requiring foundation and geotechnical engineering works will come its way this year, and that the quality of its orderbook is improving,” says Tan. “CSC expects that projects that were won previously with low prices will likely be cleared off its orderbook by 1H18… and expects any significant pick-up in activity to gain momentum only in the second half of the year.”
See: CSC Holdings wins contracts for Kim Chuan Depot Extension and underground Keppel MRT Station
“CSC will continue to proactively build up its orderbook, while optimising its asset utilisation and operational efficiency,” he adds.
As at Feb 6, 2018, CSC’s orderbook stood at $210 million.
As at 12.49pm, shares of CSC are trading 0.1 cent lower, or down 4%, at 2.4 cents. It is trading at a FY17 price-to-book value ratio of 0.3 times.
