SINGAPORE (May 15): Tai Sin Electric reported $7.3 million in earnings for the 9M ended March, a 23% decline from earnings of $9.5 million in 9M18 due to lower margins, primarily in the Cable & Wire (C&W) business segment.
Revenue for the period grew 4.43% y-o-y to $247.7 million from $237.2 million on the back of higher revenue from the C&W and Test & Inspection segments due to higher infrastructure and industrial project deliveries, as well as laboratory testing services revenue, respectively.
Gross profit margin however fell by 3.1 percentage points to 14.05%, which Tai Sin attributes to pricing pressure from stiff competition in the infrastructure sectors, which led to eroded margins of its C&W segment projects which it secured two to three years ago.
The recent surge in copper prices has also greatly affected the margins of infrastructure projects delivered by the C&W segment in both Singapore and Malaysia, it adds.
Other operating income for 9M19 more than tripled to $3.7 million from just $1.1 million a year ago, due to a foreign exchange gain as well as a fair value gain on derivative financial instruments as compared to losses suffered in the previous corresponding period.
As at end March, cash and cash equivalent stood at $16.8 million as opposed to $26.9 million a year ago.
The group says it expects the market to remain challenging in view of a weaker economic outlook for Singapore and across Southeast Asia, with pressure on selling prices and volatility in copper prices and foreign exchange rates to potentially impact its performance going forward.
As such, Tai Sin says it will persist in its efforts to secure more infrastructure projects as it continues to diligently execute cost control and financial discipline, as well as price its product and services competitively.
Shares in Tai Sin closed flat at 32 cents on Wednesday.
