Swee Hong suffers $2.1m loss in 2Q12

"Significant" reduction in revenue blamed.

In a results disclosure to the Singapore Exchange, Swee Hong Limited said that revenues from its Civil Engineering segment was hit hard in the second quarter of 2012, declining to $4.9m compared to $22.6 million from the previous year.

"Revenue from the Civil Engineering segment was derived mainly from new works order relating to our Gardens by the Bay projects where the main contract had been recognised. The Group was not able to win new contracts to make up for the decrease in revenue of S$17.7 million," the group said.

The group also incurred gross losses of S$0.2 million and a gross loss margin of 2.3%. This was attributable mainly to the significant reduction in revenue, accruals for additional sub-contractor costs on the finalisation of a civil engineering contract, and a reduction of claims for work done at the finalisation of a project.

Administrative expenses increased by S$0.1 million due mainly due to increases in staff cost (S$0.2 million) but were were partially offset by a decrease in tender activities (S$0.1) million.

Staff cost in 2Q2013 increased compared to 2Q2012; this was due to additional headcount recruited to explore new business opportunities. This inevitably contributed to the increase in salary expense. Furthermore, there were upward salary adjustments in line with the market.

This led to a loss before income tax of S$2.2 million in 2Q2013, a decline of S$3.9 million as compared to 2Q2012. This was mainly due to a decline in gross profit of S$3.8 million and an increase in administrative expenses by S$0.1 million; partially offset by an increase in other gains of S$0.1 million. Final net loss after tax came in at S$2.1 m.