Project delays crush CSE Global's earnings in 1Q

Earnings fell 29% to $9.6m.

If CSE Global were on a profits voyage, then it's topline ship must be sinking. According to CIMB, 1Q revenue dropped 4% yoy to S$92.7m due to a delay in offshore projects inthe US as well as lower turnover from the Middle East. Hurt by execution issues, the group remains selective of jobs in the region. Revenues were drivenby the Ichthys LNG project in Australia.

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At 49%, Asia Pacific is now the largest revenue contributor. EBITDA fell disproportionately by 29% yoy to S$9.6m in the absence of the higher-margin US jobs as well as the operating leverage effect. Europe/Middle East/Africa was loss-making owing to operating leverage effect. 

Below the operating items, finance costs fell by 89% yoy as the company is now in a net cash position of S$44.3m (8.6Scts), after paying out S$144.5m in special dividends in Jan. Effective tax rate came in at 14.1% due to lower profits coming from the higher-tax US jurisdiction. As a result, core net profit only dropped by 12.6% yoy to S$7.5m.