PEC after-tax profit slides to S$3.4m

Hurt by higher operating costs and taxes.

PEC Ltd. (PEC, and together with its subsidiaries, associated companies and joint venture companies, the Group) posted revenue of S$213 million for the six months ended 31 December 2013 (1H FY14) with lower contributions from its project works segment.

The Group's after-tax profit came in at S$3.4 million in 1H FY14. This was lower than the S$5.9 million posted in 1H FY13, mainly because of a rise in administration and other operating costs as well as higher taxes.

Mr Robert Dompeling, PEC's Group Chief Executive Officer, commented: “The Group has remained profitable in 1H FY14, despite the ensuing challenges in the local operating environment. The Group has also continued to add new project works and maintain a steady recurring income from maintenance services.

“The Group is taking steps to streamline our operations so that we can improve our competitiveness and better service clients in existing and other targeted markets.”

In 1H FY14, the Group’s operations generated a net operating cash flow of S$11.6 million compared with S$0.7 million in the previous half-year. The Group ended 1H FY14 with an orderbook of S$179 million, excluding maintenance contracts.

PEC’s core divisions are project works and maintenance services. Engineering, procurement and construction works account for a large share of the Group’s revenue. Plant maintenance services offer a steady recurring income stream. These maintenance contracts are long-term, reflecting clients’ confidence in PEC’s ability as a competent and reliable service provider to meet the entire maintenance needs of a production plant.

To better meet customer needs, PEC said it is constantly enhancing and expanding its capabilities through acquisitions and technological upgrading. It has also located its fabrication facilities closer to its overseas customers in an effort to improve response time to customer needs and cost-efficiency.