SINGAPORE (Nov 14): Engineering services and geo-spatial technology group Boustead Singapore reported a 7% decline in earnings to $7.1 million in the 2Q18 ended September, down from $7.6 million a year ago.
This was mainly due to the spinoff of Boustead Projects as a separate subsidiary. Total profit in 2Q18 rose 4% to $12.4 million but $5.3 million was recorded under profit attributable to non-controlling interests.
See: Boustead Singapore gets SGX nod to list Boustead Projects by way of introduction
Revenue fell 8% to $104.9 million in 2Q18, from $113.5 million a year ago. This was due to lower revenue contribution from its Real Estate Solutions and Energy-related Engineering divisions.
Faced with a challenging industrial real estate sector in Singapore, the Real Estate Solutions Division under Boustead Projects saw revenue fall 19% to $50.1 million during the quarter, with lower revenue contributions from both the design-and-build and leasing businesses.
Meanwhile, the prolonged global oil & gas recession continued to weigh on revenue at the Energy-Related Engineering Division, which was 11% lower at $22.7 million.
These were partially mitigated by a 23% increase in revenue from its Geo-Spatial Technology division to $31.7 million on the back of stronger demand for products and services.
Gross profit grew 13% to $40.8 million, with overall gross margin raised 7 percentage points to 39% in 2Q18. This was largely due to the better gross margin achieved by Boustead Projects.
Boustead Singapore reported other loss of $1.5 million in 2Q18, compared to other gain of $1.0 million a year ago, which was mainly due to currency exchange effects.
As at end September, cash and cash equivalents stood at $287.1 million.
Boustead Singapore has declared an interim dividend of 1 cent per share for the period, double of the interim dividend of 0.5 cent declared a year ago.
In a filing to SGX, the group says this is because it has delivered steady core profitability and maintained a healthy cash position.
“Even as strong headwinds persist across two of our three divisions, we continue to boost business development efforts and apply our already prudent cost management measures,” says Wong Fong Fui, chairman and group chief executive officer of Boustead.
In addition, the group notes that its revenue is largely derived from project-oriented businesses and as such, quarterly results would not accurately reflect the full-year’s performance. It adds that it believes it will continue to be profitable in FY18.
With its healthy net cash position of $200.8 million and available-for-sale financial assets and financial assets held for trading of $71.3 million, as well as wide range of financing options, the group adds that it continues to uphold an excellent position to capitalise on any good acquisition and investment opportunities that may arise.
Shares of Boustead Singapore closed half a cent lower at 88 cents on Tuesday.
