Boustead Singapore’s Q2 profit crashes 28.7% YoY to $9.6m

Multiple segments delivered poor profits.

Boustead Singapore Ltd (BSL)’s core net profit, adjusted for the 48.8% demerger of Boustead Projects, crashed 28.7% to $9.6m in Q2, according to a report by CIMB. The decline was caused mainly by reduced profitability of energy-related engineering and industrial real estate businesses.

As at Q2’s end plus new orders since, BSL’s order book remained relatively sound at $353m, though. This includes $120m for energy and $233m for industrial real estate.

Meanwhile, BSL’s geospatial division enjoyed a pre-tax profit growth of 12% YoY thanks to steady demand for the Esri technology as it is the preferred geospatial technology (about 40% of global market share) by governments across the region for the implementation of national spatial data infrastructure systems. Notably, the growth was achieved against strong currency headwinds, especially the significantly weakened A$ vs US$.

Further, BSL revealed that it is taking steps with ASX-listed Triangle Energy to acquire the latter’s 100% interest in a US$3.9m, 992 sqkm natural gas concession in Aceh, Sumatra. BSL appears confident that possible downsides are easily surmountable.

If the deal meets the approval of Triangle shareholders, it would enable BSL to to jump into upstream ownership and production of natural gas.

Looking forward, BSL management shared that it’s bracing for possible continued delays in the award of significant energy contracts for the rest of the financial year coupled lower project margins due to the dissonant demand and supply in the global oil and gas industry.