SINGAPORE (Feb 10): Boustead Singapore, the global infrastructure-related engineering services and geo-spatial technology group, has announced earnings of $9.5 million for the third quarter ended Dec 31, 26% higher from $7.5 million a year ago.
Although revenue for the quarter fell by 19% from $115.7 million from $142.3 million, total profit and net profit grew 25% and 26% y-o-y to $14.1 million and $6.5 million respectively due to the group’s non-controlling interests at Boustead Projects.
After adjusting for other gains and losses net of non-controlling interests, quarterly net profit would be 21% lower y-o-y.
Revenue contributions from Boustead’s energy-related engineering division fell 29% in 3Q to $22.1 million from $31 million a year ago as a result of “the severely depressed state of the global oil & gas (O&G) industries, [which] continued to significantly and adversely impact [the division’s] revenue”, according to the group.
Additionally, revenue contributions from the real estate solutions division under Boustead Projects fell 22% to $66.6 million, mainly due to lower revenue contribution from the design-and-build business.
The geo-spatial technology division registered an exceptional gain in revenue by 4% to $26.7 million on firm demand in Australia and Southeast Asia.
Nonetheless, profit before income tax (PBIT) for the quarter increased 13% to $17.6 million, mainly driven by higher other gains, and lower selling and distribution, administrative and finance expenses.
Boustead also notes that its gross margin for the quarter improved to 33% compared to 30% in 3Q16, although pressures continue to mount.
In its filing to the SGX on Friday, the group says it will continue to search for acquisition and investment opportunities across its divisions in related business fields, as well as in potential new business fields.
It believes it is in “excellent position to capitalise on any good acquisition and investment opportunities that may arise” given its net cash position of $171.7 million, available-for-sale financial assets and financial assets held for trading of $87.7 million, in addition to its untapped $500 million multi-currency medium-term note programme.
“Looking forward, we will continue to prudently manage our costs in view of the current macro-economic environment, which continues to be highly challenging and competitive,” says Boustead chairman and CEO Wong Fong Fui.
While the group believes it will continue to be profitable in FY2017, it cautions that the level of profit may not match that of FY2016 due to the current macro-economic environment.
Shares of Boustead closed 2.4% higher at 86 cents on Friday.
