Nordic Group reported earnings of $7.8 million in 1HFY21 ended June, a 317% surge from the $1.9 million posted in the year before.
On a fully diluted basis, earnings per share came in at 2.0 cents, up from 0.5 cents in 1HFY20.
With this, net asset value per share stood at 24.5 cents on June 30, compared to 22.8 cents on Dec 31.
To mark its jump in earnings, Nordic Group has proposed a dividend payout of 0.98 cents per share. Of this 0.78 cents is an interim dividend while 0.2 cents is a special dividend.
This represents a payout of approximately 5.2x over 1HFY20 interim dividend payout of 0.187 cents per share.
See also: Nordic Group clinches $35.6 million in contracts
Revenue for the first six months of the year expanded by 49% to $49.2 million thanks to the resumption of business activities to pre-Covid levels.
Key contributions came from a 56% rise in the group’s project services (PS) segment to $23.7 million, and a 43% increase in the maintenance services (MS) segment to $25.5 million.
Cost of sales correspondingly edged up to $35.2 million, from $25.8 million in the year before.
Gross profit came in 94% higher at $14.0 million in 1HFY21. As such gross profit margin increased to 28.4%, compared to 21.9% in 1HFY20.
Excluding the government rebates and grants such as the wage credit scheme, jobs support scheme, foreign workers levy rebate and foreign worker levy waiver, the gross profit margins were 26.0% for 1HFY21 and 12.2% for 1HFY20.
Other income and gains fell by 48% to $1.0 million mainly due to lower foreign exchange gains following a drop in the USD to SGD exchange rate.
In this time, distribution and administrative expenses remained constant at $0.5 million and $6.0 million respectively. Finance costs fell to $0.27 million, from $0.66 million in 1HFY20 due to a decline in interest rates.
Other losses in 1HFY21 hit $0.8 million due to allowance for impairment in inventories. For comparison, the other losses in 1HFY20 was $0.35 million due to allowance for impairment of trade receivables.
As of June 30, cash and cash equivalents stood at $56.2 million, down from $57.3 million in the year before.
Nordic Group clinched $122.1 million contracts in 1HFY21, bringing its outstanding order book to $135.3 million. This is expected to generate sustained revenue streams up to FY2023.
The PS segment contributes approximately $60.1 million or 44% of the combined order book, while the MS segment contributed some $75.2 million or 56%.
For more stories about where the money flows, click here for our Capital section
Going forward, executive chairman Chang Yeh Hong is “cautiously optimistic over the long-term prospects of the marine, offshore oil and gas, petrochemical, pharmaceutical, infrastructure and semiconductor sectors that the [group has operations] in”.
“Backed by our two-pronged strategy of supplementing PS contracts with the recurring income of our MS segment, our robust order book, prudent cost controls and risk management protocols, as well as further opportunities for M&A, we are confident of achieving sustainable growth for the group and delivering long-term value to all of our valued shareholders,” he adds.
Shares in Nordic Group closed up 2 cents or 6.06% at 35 cents on Aug 6.
Cover image: Nordic Group
