Civmec posts Q2 profit of S$6.9m, progresses in ASX dual listing

HIGHER contributions from existing contracts gave a fillip to Civmec's results in its second quarter ended Dec 31.

Net profit jumped to S$6.9 million from the previous year, the Western Australia-headquartered engineering services group said in a Singapore Exchange filing on Monday evening.

For the three months ended Dec 31, revenue rocketed 158.7 per cent to S$179.7 million from the year-ago period. The increase in revenue was due partly to higher contributions from existing contracts as projects ramped up during the period, Civmec said.

Gross profit was up 33.2 per cent in the second quarter, but gross margin decreased 4.8 per cent from 9.3 per cent over the comparative year-ago period due to the impact of an insurance claim relating to a fire at the end of September 2017.

In the filing, Civmec said tendering activity was strong across its operating sectors, and the group's order book as at December 2017 amounted to S$573.5 million.

The group was a participant in the tender to build 12 Royal Australian Navy's Offshore Patrol Vessels (OPVs), where it was announced that Civmec will supply all the steel for the 12 OPVs, and is currently negotiating with German military shipbuilder Luerssen to finalise the contract for the group's part in the 10 OPVs to be built in Western Australia.

Meanwhile, Civmec also said it was progressing in its bid to dual list on the Australian Securities Exchange (ASX), and has received in-principle approval to list on the ASX

Earnings per share leapt to 1.38 Singapore cents from 0.08 Singapore cent in the previous year. Net asset value per share crept up to 35.85 Singapore cents as at Dec 31, from 34.95 Singapore cents as at six months ago.

The group said barring unforeseen circumstances, it expects to be profitable in the current financial year ended June 30, 2018.

No dividend was proposed. Civmec shares finished S$0.015 or 2.8 per cent down at S$0.515 on Monday.