Libra's net profit slumps 26.1% to $1.6m in 1H2016

Administrative expenses, higher wage expenditures are among the culprits.

Singapore-based integrated business solutions company Libra Group has registered a low net profit despite surge in revenues, as salaries and administrative expenditures shoot up in the first half of the year.

Libra’s net profit for 1H16 fell down to $1.6 million from $2.2 million for the same period last year.

This is despite the 13% increase in the group’s revenue, now at $44.2 million -- thanks to the good performance of its mechanical and electrical engineering (M&E) segment.

However, Libra's manufacturing segment did not fare so well, recording a decrease of $1.6 million in revenues due to lower re-sales volume.

The same goes to its building and construction solutions segment, posing a decreased revenue of $1.8 million.

While the M&E segment continues to bolster strong revenue growth for Libra, it also had its downsides: the decrease in its gross profit margin, primarily due to more competitively priced projects, continue to hurt the group's net earnings.

Libra Executive Chairperson and CEO Chu Sau Ben remained optimistic, saying the group would continue to improve its cost effectiveness despite regulations upsetting the property sector.

"Amidst the local property sector reeling under the lingering effects of the cooling measures, it has been challenging for the building and construction industry. We will continue to steer a firm course by enhancing our cost effectiveness and efficiency optimization for our new wins and current projects while seeking opportunities to broaden our sources of revenue.” Chu said.

More so, Chu said the group will put their best foot forward by leveraging its strong track record in building construction and M&E segments to secure more projects.