Boustead Singapore loses $4.5m on an available-for-sale investment

Net profit only reached $15.3m.

In a release, Mainboard-listed Boustead Singapore Limited announced its unaudited financial results for the second quarter ended 30 September 2012.

For 2Q FY2013, the Group achieved revenue of S$112.2 million and net profit before income tax of S$15.3 million, an increase of 9% over 2Q FY2012. This profit reflects an impairment loss of S$4.5 million on an available-for-sale investment, without which net profit before income tax would have increased by 41%.

Profit attributable to owners of the company was further boosted by a one-off S$4.8 million writeback of prior year income tax provisions to S$15.3 million, an improvement of 68% over 2Q FY2012.

The stronger 2Q FY2013 financial results lifted the Group’s 1H FY2013 revenue to S$225.6 million and net profit attributable to owners of the company to S$27.5 million, an increase of 24% and 56% respectively.

Profit growth was led by the strong performance of the Real Estate Solutions Division. All of the significant core operating divisions achieved profitability.

The Board declared an interim cash dividend of 2 cents per ordinary share in 2Q FY2013, matching the interim dividend of 2 cents per ordinary share declaredand paid for 2Q FY2012.

The Real Estate Solutions Division achieved revenue of S$51.2 million, up 126%, contributing entirely to the Group’s revenue growth in 2Q FY2013. Scheduled progress was attained across the division’s sizeable order book backlog of design-and-build projects.

The Energy-Related Engineering Division saw a revenue decline of 14% to S$30.2 million, which resulted from design delays at a few major projects. The division expects to make up lost ground on these major projects in subsequent quarters.

At the Water & Wastewater Engineering Division, revenue was S$4.8 million, down 27%. The slowdown was caused by the division’s lower order book backlog and execution of fewer projects as compared to the previous year’s corresponding quarter.

Revenue from the Geo-Spatial Technology Division declined marginally by 2% to S$26.0 million resulting mainly from a weaker Australian Dollar compared to 2Q FY2012.

Mr Wong Fong Fui, Chairman and Group Chief Executive Officer of Boustead said, “Barring unforeseen circumstances, we expect the full-year results for FY2013 to be better than the previous year. In addition, our net cash position jumped from S$147 million to S$179 million quarter-on-quarter, strengthening our available funds for acquisitions and investments. Recently, we deployed S$20.1 million to invest in a joint venture developing a 402,000 square metres mega mixed office, residential and retail complex at the heart of Beijing Tongzhou, the capital’s next central business district - this project presents an excellent opportunity for the company to expand its expertise and track record and marks our first foray into commercial/retail developments in China.”

The Group’s order book backlog currently stands at S$288 million (as at the end of 2Q FY2013 plus new orders since then), a small decline over the S$303 million as at the end of 1Q FY2013. Enquiry pipelines remain healthy across the four core operating divisions although negotiation periods have been slightly protracted with tightening margins in Real Estate Solutions.