Sysma pumps up 1H13 net profit by 17.7% to $3.1m

That's in spite of lower revenues.

Catalist-listed Sysma Holdings Limited (Sysma) or “the Group”) announced a 17.7 per cent increase in net profit to $3.1 million for the half year ended 31 January 2013 (1HY2013), compared to $2.6 million for the corresponding period last year (1HY2012).

The company said this net profit was achieved despite lower revenues of $17.5 million for 1HY2013 compared with $20.2 million for 1HY2012, a decrease of 13.4 per cent. The decrease was mainly due to the absence of revenue contribution from five major bungalow projects which were completed in HY2012.

Revenue contribution from these 5 major projects totalled $10.6 million. These were partially offset by revenue contribution from new projects in HY2013 and another on-going project. Despite the decrease in revenue, the Group increased its net profit mainly through lowering its costs. 

The Group generated a gross profit of $5.3 million in 1HY2013, up 46 per cent as compared to $3.6 million for the corresponding period last year.

Mr Sin Soon Teng, Executive Chairman and Chief Executive Officer of Sysma, said: “The half year results were commendable. Through strict cost control, we have been able to increase the gross profit and also the net profit despite a decrease in the revenue. During the past six months, we have also completed the purchase of the properties in Race Course Lane. At the same time, we expect to complete the acquisition of De Paradiso Development Pte Ltd which owns two plots of land in Serangoon, by the end of March 2013.”

On a fully diluted basis, the Group’s earnings per ordinary share increased to 3.27 cents for 1HY2013 from 2.78 cents for 1HY2012. As at 31 January 2013, the Group’s net asset value per ordinary share stood at 16.26 cents, compared to 14.52 cents as at 31 July 2012. All of the above are based on the issued share capital of 95,000,000 ordinary shares.

No interim dividend has been declared for the half year ended 31 January 2013. 

On its business prospects, Sysma said that since Sysma’s listing on SGX-Catalist in early August 2012, it has announced that its wholly-owned subsidiary, Sysma Properties Pte Ltd, had acquired two adjacent properties at Race Course Lane. The acquisition of these properties have been completed. Plans are in the pipeline to develop the properties into shops and residential units. This will pave the way for Sysma to go into property development, the company said.

In December 2012, Sysma announced the acquisition of De Paradiso Development Pte Ltd. De Paradiso Development Pte Ltd is a private Singapore-incorporated investment holding company which owns two plots of land located at Serangoon. It is Sysma’s intention to obtain the ownership of these two plots of land through the proposed acquisition. The acquisition will be completed by the end of March 2013. In line with the Group’s existing business strategy and future plans, Sysma will continue to embark on other similar ventures when the opportunity arises.

Despite the government introducing cooling measures to curb the rise of property speculation and prices, the demand for Good Class Bungalows (GCBs) will remain stable as there is limited supply. Although there may be challenges such as the rise in raw material and labour costs as well as government regulations to tighten the supply of foreign workers, Sysma is taking steps to address them.