SINGAPORE (Feb 26): Federal International (2000) reported a 68.9% decline in 4Q earnings to $1.1 million from $3.7 million a year ago on lower other income. This brings the group’s earnings for the full year to $4.2 million, down 41.7% from $7.3 million in FY16 due to lower margins.
Revenue for the full year grew 45.2% to $130 million compared to $89.5 million on the back of higher revenue contributions from the group’s Trading business segment.
However, due to lower margins on sales for certain projects under the Trading business segment also led to a decline in gross profit margin to 17.1% in FY17 from 19.9% the year before.
Other income also fell significantly by 71% to $3 million compared to $10.4 million in FY16 in the absence of a foreign exchange (forex) gain, gain on disposal of asset and service fees in relation to a project over FY16.
Total operating expenses fell 11.5% to $18.7 million from $21.1 million in the previous financial year as a result of lower sales to customers in China, as well as lesser marketing-related and selling & distribution expenses.
The group has proposed a final dividend of 1.5 cents and a special dividend of half a cent for the period under review.
In its outlook, Federal International says it intends to focus on building up its order book while forming strategic partnerships in the region, in order to secure businesses of higher contract value for its Trading business moving forward.
“We believed that striking out valuable partnerships to expand our opportunities, co-sharing the risks and co-bidding for higher value projects is the way to move forward. With Brent crude oil prices off its low and stabilising above US$50 per barrel for most parts in FY2017, we remain cautiously optimistic of a recovery in the sector,” says executive chairman and CEO, Koh Kian Kiong.
Shares in Federal International closed flat at 39 cents on Monday.
