King Wan Corporation net profit slides 50% to S$7.1m

Hit by lower gross profits.

In a release, Mainboard-listed mechanical and electrical engineering specialist King Wan Corporation Limited (King Wan), announced its results for the 12 months ended 31 March 2013 (FY2013), with net profit after income tax (net profit) was S$7.1 million, translating to earnings per share of 2.02 cents.

Net profit was 50 per cent lower compared to the S$14.0 million a year ago due to lower gross profits from its M&E engineering contracts and lower contributions from its associates, the company said. Net profits in FY2012 had also benefited from a one-off gain in disposal of the Group’s investment property.

Revenue spiked 16 per cent to S$66.3 million compared to S$57.2 million in the last financial year. The increase in revenue was due to the higher revenue recognised on M&E engineering contracts during the year.

The Board of Directors is proposing a final dividend of 1.0 cent per share payable on 16 August 2013. The Company had also earlier paid out an interim dividend of 0.5 cent per share on 5 December 2012. The total dividends for FY2013 amounting to 1.5 cents will give an annual dividend yield of 4.5 per cent based on 29 May 2013’s closing price of 33.0 cents and an annual dividend payout ratio of 74 per cent.

Ms Chua Eng Eng, Managing Director of King Wan said: “The global economic uncertainties and the cooling measures implemented on the property market by the Singapore government continue to impact the business environment in which King Wan operates. The Group will continue to focus on bidding for more quality M&E engineering projects. We will also continue to expand our horizon and diversify our revenue streams. A good example would be the entry into the vessel owning and chartering business during the year. In addition, the listing of Kaset Thai Industry Sugar Company Limited (KTIS)’s shares is expected in July 2013 and the listing will help to strengthen our balance sheet, improve our cash flow and net asset value.

“We are pleased that in the last 6 months, we had secured S$28.4 million worth of new M&E engineering contracts. Our current order book remains strong, with M&E engineering contracts worth S$166.6 million, which are expected to be completed from 2013 to 2016.”