Boustead's net profit down 41.2% to $11m in Q3

Due to lower margins.

Boustead reported that its core profit after tax and minority interest plunged 41.2% year-on-year to $11m in the third quarter, due to lower margins on back of the recent slowdown in order wins.

In 3QFY15, group revenue jumped 37% yoy to $178m due to the completion of a large industrial real estate project, although the revenue surge did not translate to profitability due to the compressed margin.

According to CIMB, while FY15 energy revenue should be safeguarded by its current order book, which stands at $162m, Boustead is likely to see a shortfall in energy projects in FY16 due the recent slowdown in new order wins.

“We project energy revenue of S$140m in FY16, vs. S$197m in FY15. Besides that, Boustead would continue to feel margin pressure from rising competition and labour cost in its industrial real estate division,” stated CIMB.