COSMOSTEEL Holdings reported on Thursday that its net profit for the fiscal second quarter ended March 31, 2015, fell 88 per cent to S$267,000 from S$2.2 million a year ago.
Revenue fell by S$9.5 million or 22 per cent to S$33.2 million from S$42.7 million. For the half-year period, revenue fell 22.9 per cent to S$59.7 million, with the energy sector contributing 76.5 per cent.
The group saw a decrease of S$17.4 million or 27.7 per cent in revenue from customers in the energy sector on the back of flagging oil prices - from S$63.1 million in the fiscal first half of 2014 to S$45.6 million in fiscal first half of 2015. Revenue from the marine and others sectors also fell, while revenue from the trading sector saw an increase of S$3.9 million or 179.2 per cent to S$6.1 million in H1 2015 from S$2.2 million a year ago.
Looking ahead, Cosmosteel remains cautious in its outlook for the rest of the financial year.
Generation of revenue for the rest of the financial year is expected to be challenging due to slower order book growth in the energy sector, its main revenue contributor, due to falling oil prices.
Gross profit margin is also expected to continue to come under pressure due to the competitive conditions.