SINGAPORE (Nov 8): Boustead Projects announced that 2Q18 earnings increased 31% to $9.5 million compared to $7.3 million in 2Q17.
However, revenue was down 19% to $50.1 million from $62.2 million a year ago, due to lower revenue contributions from both the design-and-build and leasing businesses.
Revenue from the design-and-build segment was 22% lower y-o-y at $42.2 million from $53.9 million last year, as 2Q17 had more projects with greater work progress.
In addition, there was lower total value of contracts secured during FY2017 for revenue conversion during 2Q18.
Revenue from the leasing segment was also down 5% to $7.9 million from $8.3 million last year, mainly impacted by the lack of contribution from 36 Tuas Road due to AusGroup’s early lease termination in 4Q17, but was partially offset by contribution from new leases and development management fees.
In line with the decrease in revenue, cost of sales declined 33% to $31.6 million from $46.8 million last year.
Hence, gross profit was at $18.5 million for the second quarter ended September, an increase of 20% from $15.4 million in 2Q17, mainly due to productivity improvements and the unlocking of project cost savings.
Total overhead expenses for 2Q18 – which includes selling and distribution expenses of $1.1 million, and administrative expenses of $6.2 million – rose 25% y-o-y to $7.3 million, in line with investment in new capabilities under the Boustead Projects' regional growth strategies and increased professional fees related to recruitment, legal and joint venture investments.
As at Sept 30, the group’s cash and cash equivalents stood at $122.9 million.
The group’s current order book backlog stands at approximately $175 million.
Thomas Chu, managing director of Boustead Projects says, “Looking ahead, we expect the second half of FY2018 to remain challenging. We shall emphasise on driving cost and productivity improvements. Nonetheless, with our healthy balance sheet and strong net cash position, we will continue to pursue strategies to strengthen our smart building and eco-sustainable capabilities, focus on higher value industries, and build further strategic partnerships and platforms regionally.”
Shares in Boustead Projects closed 86 cents on Wednesday.
