Yongnam Holdings hit by 38.7% crash in profits

Even revenue slipped 17.1%.

According to a release, Yongnam Holdings Limited, a well-established structural steel contractor and specialist civil engineering solutions provider, today announced its results for the three months ended September 30, 2012 (“3Q2012”).

Yongnam reported a lower Group revenue of S$71.7 million for the quarter, a 17.1% decrease from S$86.5 million in the corresponding quarter (“3Q2011”), on the substantial completion of some of the Group’s Structural Steelworks projects at the end of 2011, and affected by slower progress in certain ongoing projects in the Structural Steelworks segment.

Net profit decreased 38.7% from S$16.8 million in 3Q2011 to S$10.3 million in 3Q2012.

Mr Seow Soon Yong, Chief Executive Officer of Yongnam, said: “The lack of higher-margin iconic projects since end-2011 has invariably impacted our gross margins and slower progress in some of our projects this quarter have affected our overall earnings. Still, despite a more challenging business environment, we remain profitable and continue to build upon our business fundamentals and steelworks capabilities, pursuing new projects both in Singapore and overseas. Our order book remains strong at S$442.0 million, which is expected to contribute to the Group’s financial performance progressively in the coming quarters.”

The Group is also exploring opportunities to complement its existing business in Structural Steelworks and Specialist Civil Engineering. It recently participated in an offshore wind power mission trip to Europe organised by IE Singapore and is looking into possible tie-ups with potential European partners to work on wind turbine foundations.

Amidst prevailing macroeconomic weakness, the Group is pursuing both infrastructural and commercial projects in Singapore, Hong Kong, Malaysia, India, Indonesia and the Middle East. “The Group expects that it will perform reasonably well though the lack of higher-margin iconic projects will affect earnings in 2012,” concluded Mr Seow.