SINGAPORE (May 14): BRC Asia, the provider of steel reinforcement solutions, reported 2Q19 earnings surged eightfold to $5.4 million from $0.66 million in 2Q18.
This brings 1H19 earnings to $11.5 million, representing a near fourfold increase from $3.0 million in 1H18.
Following the group’s acquisition of Lee Metal Group on Jul 20 2018, the group has now included 100% of Lee Metal’s financial results in its earnings statement for 1H19 and 2Q19. In contrast, Lee Metal’s 1H18 and 2Q18 earnings were not included in the group’s results the same period last year.
Revenue for the quarter more than doubled to $231.1 million from $109.0 million a year ago, mainly attributable to higher volume of value-added sales tonnage delivered which Lee Metal had also contributed in part, as well as increase in selling prices arising from higher steel costs.
As cost of sales also increased by 113% y-o-y to $217.1 million, 2Q19 gross profit came in at $14.0 million, double that of $7.1 million in 2Q18.
Other income also surged 323% to $1.0 million from $0.2 million last year, mainly due to a net gain from fair value changes on currency forward contracts of $0.3 million.
Finance costs increased by 277% y-o-y to $5.5 million, while other operating expenses increased by 42% y-o-y to $3.4 million.
As at end March, the group’s cash and cash equivalents stood at $39.8 million.
Seah Kiin Peng, CEO of BRC Asia, says, ““The acquisition of Lee Metal has proven to be value accretive both internally and externally. Internally, the deepened integration between BRC and Lee Metal and enhanced operational efficiency and cost savings have led to an encouraging set of financial results. Externally, the market landscape is becoming healthier as the supply and demand imbalances throughout the construction supply chain righted themselves as the downturn in the last few years drew to a close. BRC is now in a strong position to capitalise on both internal and external opportunities to create more value for both our customers and shareholders.”
As at 12.15pm, shares in BRC Asia are trading at $1.34.
