Steel supplier BRC Asia BEC BEC has reported earnings of $75.7 million for its FY2023 ended Sept 30, down 16% y-o-y, due to losses and impairment of some $7.8 million from its minority investment in the Maldives.
As a result, earnings per share also decreased 16% y-o-y to 27.6 cents for FY2023 compared to 33.0 cents in FY2022.
For the latest full-year period, BRC Asia’s revenue came to $1.63 billion, down 4% y-o-y, mainly attributable to a lower contractual offtake in 1HFY2023 and market-driven lower selling prices. This was partially offset by improved sales volume during FY2023.
Accordingly, cost of sales also dipped by 4% y-o-y to $1.49 billion in FY2023.
In tandem with the weaker revenue, BRC Asia’s gross profit for the full-year period fell by 10% y-o-y to $139.0 million while its gross profit margin stood at 8.5%, down 0.5 percentage points compared to FY2022.
Despite the relatively weak FY2023 performance compared to its record results in the preceding year, the company believes it has embarked on a “steady recovery path” over the last six months, with gradually normalising activity levels of local construction projects.
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For its 2HFY2023, BRC Asia recorded earnings of $49.5 million, down just 2% y-o-y, and revenue of $909.9 million, a $4.0 million increase over 2HFY2022.
As at Sept 30, its cash and equivalents stood at $184.6 million.
Meanwhile, its order book came to $1.3 billion, to be delivered over the coming five years.
On the back of improving industry prospects and solid company “fundamentals”, BRC Asia plans to pay a final dividend of 5.5 cents and a special dividend of 5.5 cents, bringing the total dividend for FY2023 to 16 cents.
CEO Seah Kiin Peng says that Singapore’s construction sector continued to grow in the third quarter of 2023, posting a y-o-y growth rate of 6% and backed by the expansions in both public and private sector construction output.
The “favourable” prospects from construction demand include the advancement of mega-infrastructure projects, such as Changi Terminal 5 and Tuas Mega Port, which are expected to make substantial contributions to the long-term industry outlook.
Nevertheless, near-term challenges, such as labour shortages, workplace safety concerns, and increasing utility costs, continue to persist in the sector, says Seah.
"Despite generally slower project progress across Singapore in the first half of our financial year 2023 and suffering significant losses from our 17% minority investment in the Maldives, the group still managed to secure the second-highest full-year net profit of $75.7 million in its history on the back of a strong second half. ," says Seah.
“We are also honoured to receive ‘Overall Sector Winner’ and ‘Highest Returns to Shareholders Over Three Years’ at The Edge Singapore’s Centurion Dollar Club Awards 2023. These awards serve as confirmation of our commitment to achieving business excellence and generating sustainable value for our stakeholders,” he adds.
Shares in BRC Asia closed flat at $1.65 on Nov 21.
