CSE Global 544 announced that its FY2022 ended Dec 31, 2022, earnings have declined by 68.2% y-o-y to $4.77 million from $15.0 million a year ago, mainly due to higher operating expenses.
Revenue for the period was higher by 19.0% at $557.7 million from $468.7 million last year. This was mainly due to growth in infrastructure project revenues in Australia and the Americas region.
Despite higher revenues, net profit declined by 68.2% y-o-y to $4.8 million, mainly impacted by lower gross margins from higher project execution costs and cost overruns, as well as higher operating expenses.
In line with higher revenues, gross profit increased by 7.6% y-o-y to $146.2 million. Gross margin decreased by 2.8% to 26.2% in FY2022, impacted by increase in project execution costs due to supply chain disruptions and cost overruns from some projects resulting in lower gross margin, particularly in the Americas region.
In the 2HFY2022, the group restructured a business division in USA in line with periodic reviews of its various business operations around the world. Post-exercise, a one-off restructuring cost of $1.3 million was incurred in order to focus on profitable income streams for the future. The group also recorded cost overruns in two projects, whereby the costs to execute these were under-accounted for. These factors led to a drop in net profit for the FY2022 period.
Total operating expenses was 19.1% higher y-o-y at $138.0 million from $115.9 million a year ago. This was due to higher personnel costs, a one-off restructuring cost, higher selling and distribution expenses, increase in upkeep of building and equipment costs and impact of newly acquired subsidiaries.
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Cash and cash equivalents as at end-December stood at $24.1 million.
CSE Global’s board has declared a final cash dividend of 1.5 cents per share, unchanged from the previous year. Together with the interim dividend of 1.25 cents paid out in 1HFY2022, the group’s total dividend paid out for the FY2022 period stands at 2.75 cents.
Lim Boon Kheng, group managing director of CSE Global says: “FY2022 was an exciting year for CSE Global, where we saw our diversification strategy pay off through the y-o-y growth in revenue and orders. We successfully completed our rights issue with the support of our shareholders, as well as the acquisition of Logic Wireless and Radio One Group, which will further strengthen our offerings in the radio communications solutions space.
While CSE Global saw significant growth in new orders received during the year, our margins have been impacted by an increase in project execution costs due to ongoing supply chain disruptions and project cost overruns. Looking ahead, we will be laser-focused on integrating our latest acquisitions and executing backlog orders while closely monitoring our costs.”
Shares in CSE Global closed at 35 cents on Feb 27.
