CSE Global Limited has reported net profit of $5.1 million for the 3QFY2020 ended Sept 30, some 11.6% lower than net profit of $5.7 million a year ago.
In its business update released on Nov 11, the oil, gas and telecommunications operator attributed the decline to the one-off divestment gain of its former subsidiary S3ID Group that netted the group some $0.7 million in 3QFY2019.
The lower net profit was also attributable to the higher effective tax rate levels in 3QFY2020.
Revenue for the quarter gained 5.7% y-o-y to $117.9 million due mainly to the revenue recognition from large oil and gas reserves secured in 2019 in the Americas. The higher revenue was also supported by contributions from new acquisitions, and partially offset by lower flow in revenues from base business.
In line with the revenue growth, earnings before interest and taxes (EBIT) grew 11.5% y-o-y to $7.8 million, supported by stable growth margins.
The group’s order intake for the quarter fell by 41.7% y-o-y to $91.0 million compared to the $156.1 million logged in 3QFY2019. The lower order was a result of lower orders in the oil & gas segment as well as from the impact of a one-off adjustment of order intake in the 3QFY2019 due to the consolidation of Volta’s order book. Volta was acquired at the end of August 2019.
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As at Sept 30, CSE Global’s order book stood 14.8% y-o-y higher at $267.0 million.
For the 3QFY2020, CSE Global generated a cash inflow from operations of $12.1 million. It also lowered its net debt position to $29.9 million as at end September 2020 compared to the $44.5 million in FY2019 “due to better working capital management”.
Amid numerous uncertainties due to the Covid-19 pandemic, low oil and gas prices and weak global economic outlook, CSE’s group managing director Lim Boon Kheng notes that “CSE expects to have some negative impact from the flow business, which is mitigated by the contributions from the two acquisitions made in 2019. Hence, the Group remains confident to achieve financial performance for FY2020 similar to FY2019.”
Shares in CSE Global closed 1.5 cents lower or 3.2% down at 45.5 cents on Nov 11.
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