SINGAPORE (Nov 14): Yongnam Holdings, the structural steel contractor and civil engineering solutions provider, saw 3Q net losses widen to $4.9 million from $0.6 million a year ago.
The group incurred a gross loss of $1.7 million in 3Q17 compared to gross profit of $4.8 million in 3Q16. This was as a result of lower margins from certain projects, as well as the overall lower level of strutting and fabrication activities which resulted in overhead costs not being fully absorbed.
Revenue fell 29.4% to $68.4 million in 3Q17, from $96.9 million a year ago, on lower contributions from the group’s Structural Steelworks and Mechanical Engineering businesses.
Revenue contribution from Structural Steelworks decreased 47.1% to $36.6 million in 3Q17, mainly due to substantial completion of Marina One, Jewel Changi Airport and Senoko Food Hub projects.
Mechanical Engineering revenue tumbled from $9.6 million a year ago to $0.1 million in 3Q17, due to the completion of the fabrication of Heat Recovery Steam Generator (HRSG) non-pressure parts for two power plants in Qatar and Egypt.
The decline was partially mitigated by higher revenue from Specialist Civil Engineering projects, which grew 56.8% to $25.6 million during the quarter due to higher contribution from Woodlands Health Campus and Thomson-East Coast MRT projects.
Net asset value (NAV) per share fell to 60.21 cents as at Sept 30, 2017, from 62.94 cents as at Dec 31, 2016.
As at end September, cash and cash equivalents stood at $16.1 million.
”While the business and operating environment remained challenging, Yongnam continues to actively participate in bidding for various major public sector infrastructure projects in Singapore, Hong Kong, Australia, Malaysia and the Middle East. If secured, the new contract wins will make a significant impact only from 2018 onwards,” says Yongnam CEO Seow Soon Yong.
In a filing to SGX on Tuesday, the group says it is in pursuit of $1.16 billion worth of new infrastructural and commercial projects.
The group’s order book stood at $208 million as at Sept 30, 2017.
Shares of Yongnam closed 1 cent lower at 31.5 cents on Tuesday.
