Yongnam swings into $4.1 mil loss in 2Q

The loss incurred is due mainly to lower margins from certain projects as well as overall lower level of strutting and fabrication activities which resulted in overhead costs not fully absorbed.

On a segmental basis, revenue contribution from Structural Steelworks posted an 8.6% dip to $49.3 million in 2Q17 with Senoko Food Hub and Jewel Changi Airport as key contributors.

With the completion of the fabrication of Heat Recovery Steam Generator non-pressure parts for two power plants in Qatar and Egypt, the Mechanical Engineering division saw its revenue decline to $0.2 million in 2Q17 from $9.7 million in 2Q16.

Revenue from the Specialist Civil Engineering rose 21.4% to $23.5 million in 2Q17, due mainly to higher contribution from Thomson-East Coast MRT projects.

Besides the Thomson-East Coast MRT, Hong Kong MTR was the other key revenue contributor in the quarter under review.

Meanwhile, general and administrative expenses decreased 35.4% to $3.30 million in 2Q17 from $5.10 million in 2Q16, mainly due to lower staff costs, professional fees and other general and administrative expenses.

Finance costs decreased 12% to $1.23 million in the second quarter ended June compared to $1.40 million the previous year, mainly due to lower borrowings.

Seow Soon Yong, CEO of Yongnam, says, “The business and operating environment for the Group is expected to continue to remain challenging in the year ahead.”

“Nonetheless, backed by our strong track record as a well-established structural steel contractor and specialist civil engineering solutions provider, Yongnam has been bidding for various major public sector infrastructure projects in Singapore this year and is also actively bidding for various infrastructure projects in Hong Kong and Australia.” Seow adds.

Shares in Yongnam closed at 26 cents on Monday.