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CSE Global Q2 profit down 44.5%; expects positive cash flow and profits for 2016

CSE Global has reported a net profit of S$5.5 million for the second quarter ended June 30, 2016, down 44.5 per cent from S$9.9 million a year ago.

Revenue at the system integration and computer network system provider fell 32 per cent to S$74.3 million from S$109.1 million previously.

The numbers for the period a year ago, however, included revenue and profit, as well as a gain from disposal, from a diesel engine services subsidiary. The unit was sold last June.

Excluding the discontinued operations, net profit from continuing operations came to S$7.7 million a year ago, trimming the year-on-year percentage dip this year to 29 per cent.

CSE, which is exposed to the oil and gas and mining industries, attributed the poorer results to lower revenues due to the lack of large oil and gas greenfield projects. Nevertheless, gross margins improved due to better margins from some completed projects.

The company declared a dividend per share of 1.25 Singapore cents, unchanged from a year ago. Earnings per share came to 1.07 cents for the quarter, down from 1.92 cents a year ago.

The company's order book inched up to S$186.6 million as at end-June, from S$179.6 million as at end-March.

Lim Boon Kheng, group managing director of CSE, said in a statement that he expects the third quarter to be weaker than the second. Nevertheless, the company is confident of a positive cash flow and profits for the year, as well as maintaining its annual cash dividend of S$0.0275 per share.

Net asset value as at end-June came to S$0.4538 a share, versus S$0.4682 as at end-2015. CSE last traded at S$0.465 a share, up a cent, before results were released.