Pec Limited IX2 has reported earnings of $2.9 million for the 1HFY2023 ended Dec 31, 202, 43% lower than the earnings of $5.0 million in the corresponding period the year before.
Revenue fell by 2% y-o-y to $191.0 million due to lower revenue from its maintenance services segment.
Gross profit increased by 4% y-o-y to $44.4 million as its gross profit margin increased by 1 percentage point y-o-y to 23%. The higher gross profit and GPM were mainly due to project completions.
During the period, the group saw a write back of $15,000 on financial assets and contract assets from the $525,000 in impairment losses in the same period the year before. The impairment in 1HFY2022 was mainly arising from an estimated credit loss assessment on overdue receivables.
Profit before tax fell 31% y-o-y to $5.6 million.
As at Dec 31, 2022, cash and cash equivalents stood at $138.5 million.
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No dividend has been declared.
In a separate announcement on the same day, Pec said that it was awarded new contracts worth some $128.0 million for various engineering, procurement & construction (EPC) and construction projects for both local and overseas companies. The contacts were awarded since July 1, 2022.
One of the contracts requires Pec to provide mechanical works for an existing multinational corporation (MNC) client, while another is for the provision of early EPC project works for a storage terminal in the United Arab Emirates (UAE). The other contracts include project works for clients in Thailand.
“The award of these contracts demonstrates clients’ confidence in our ability to deliver the projects on time and successfully,” says Robert Dompeling, PEC’s group CEO.
“The geopolitical landscape has created uncertainties in the year ahead. However, the oil & gas sector will continue to play a major role in the global energy system and oil and gas companies will continue to maintain their focus on investing in security of supply in the short term while transitioning to cleaner energy in the long term,” he adds.
Looking ahead, Dompeling said the group is “cautiously optimistic” about its prospects in the near to medium term.
“To capture a share of the potential pipeline of projects coming onstream, the group is building a new fabrication facility in Abu Dhabi, UAE to support the group’s EPC works, maintenance services and modular solutions for offshore and onshore projects as well as green energy projects in the Middle East and around the region,” he continues.
Barring any unforeseen circumstances, the latest contracts are expected to contribute positively to the group's earnings for the financial year ending June 30, 2023.
Shares in Pec closed flat at 57.5 cents on Feb 13.
