Neratel’s gross profit margins crashed 33.5% in 1Q15

Due to a sales change and a one-off project.

The telecom segment remains rather subdued, with some revenue from abroad not being recognised.

According to a report by RHB Group, this affected Neratel’s 1Q15 performance, as a change in the mixture of equipment sales as well as a one-off low-margin project in the payment solutions segment for a Thai customer resulted in a 33.5% dip in its gross profit margins.

The one-off transaction was done to increase the chances of securing a longer-term maintenance contract.

The telecom segment is still disappointed, with some revenue from the Middle East and Africa region not being recognised, as a result of a delay in the shipment of point-to-point equipment to Nigeria as well as a late contract win from Pakistan, causing revenue from the region to plunge 63.4% YoY to SGD2.5m.