SINGAPORE (Aug 8): Engro Corporation, the provider of building materials, reported earnings of $0.9 million for the 2Q17 ended June, down 80.5% from its earnings of $4.5 million in 2Q16.
Revenue in 2Q17 fell 6.8% to $36.5 million from $39.2 million in 2Q16 due to softer market demand from its integral cement and ready-mix concrete segment, although the impact of this was cushioned by good revenue growth in its specialty polymer business segment during the period.
The group’s investment segment also recorded an impairment loss which resulted from a weaker USD as well as weaker performance from its integral cement and ready-mix concrete segment, says the group in its filing to the SGX on Tuesday.
This comes despite the group’s China joint ventures reporting improved performance over the quarter, due to the recovery of selling price as a result of reduction of overcapacity in the cement industry.
As such, Engro swung into a loss before share of profit of associates and joint ventures of $1.9 million in 2Q17, compared to a profit of $3.2 million in 2Q16.
Looking ahead, the group expects its China joint ventures to continue positively to its overall performance. It also anticipates stronger demand from the public sector to support the construction industry over 2H17, and hence benefit its integral cement and ready-mix concrete business.
“Smaller decline in private residential property prices and the drop in unsold stocks reported recently are among the signs that the property market might be close to bottoming out,” notes Engro.
Shares in Engro closed 1 cent higher at 96 cents on Tuesday.
