Mainboard-listed MTQ Corporation M05 has reported a profit after tax of $7.6 million for the 1HFY2024 ended Sept 30, 342% higher than its restated profit after tax of $1.7 million for the corresponding period the year before.
The surge in profit was due to the $6.4 million gain on disposal of the group’s property located at 182 Pandan Loop (Pandan property). The group granted an option to a third party for the sale of its property with certain plant and equipment as part of its relocation process on Sept 1, 2022. The aggregate consideration for the option was $6.0 million. The option was exercised on the same day to which its fee and deposit of 5.0% of the sale price was received by MTQ in the FY2023 ended March 31.
The gain on disposal was recognised within the group’s other income. Other income, including the group’s gain on disposal of $6.4 million, surged to $6.7 million from $453,000 in the six-month period the year before.
Excluding the gain, MTQ’s net profit would have been $1.2 million, around 30.5% lower y-o-y.
Revenue for the 1HFY2024 rose by 8% y-o-y to $37.7 million as its Bahrain market saw revenue increase by 32.4% y-o-y to $18.4 million. The group’s businesses in Australia and the UK saw revenue increase by 6.8% y-o-y to $2.6 million. The growths in these markets were offset by the 10.3% y-o-y decline in revenue in Singapore, which stood at $16.7 million.
The lower y-o-y revenue in Singapore was partly affected by the final stages of MTQ’s relocation process and by the “natural ebb and flow of order conversion”. However, the group says that inquiries for its services remain “robust” with the group committed to “optimizing utilization wherever possible”.
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Gross profit for the 1HFY2024 rose 6% y-o-y to $11.4 million as revenue increased along with its cost of sales. Gross profit margin for the period dipped by 0.4 percentage points y-o-y to 30.4%.
During the period, the board of directors have approved an interim dividend of 0.5 cents per share due to the overall increase in profit for the 1HFY2024.
In the same period, MTQ recorded net cash inflows from operating activities of $4.3 million.
Cash and cash equivalents as at Sept 30 stood lower at $8.6 million, down from $13.6 million previously.
“The group is pleased to report another profitable period. Drilling activities continue to increase especially in the Middle East, inquiries remain healthy but conversion into revenues in Singapore was slower in the period,” says Kuah Boon Wee, MTQ’s group CEO.
“We are pleased to have finally disposed of our Pandan property. The gain on disposal of $6.4 million helped boosted the group’s financials and provides us bandwidth to undertake more growth initiatives as well as to manage finance costs in the face of rising interest rates. Costs have also risen due to inflationary economic conditions. Nonetheless, we anticipate the cost environment to stabilize moving forward,” he adds.
The proposed interim will be paid at a date to be announced later.
Shares in MTQ closed 0.5 cents higher or 1.49% up at 34 cents on Oct 25.
