OKP Holdings' Q2 profit doubles on higher revenue

CONSTRUCTION firm OKP Holdings on Monday reported that its second quarter net profit doubled to S$4.95 million from a year ago, on the back of strong growth in revenue from its maintenance segment.

For the three months as at end June, revenue came in at S$34.4 million, up 43.2 per cent year on year. This was due mainly to growth in its core business segments - construction and maintenance.

"The increase in revenue from both segments was due mainly to some of the projects progressing to a more active phase during the second quarter ended June 30, 2017," the group said on Monday in filings to the Singapore Exchange.

Cost of works in Q2 went up 32.4 per cent to S$26.4 million, largely because of an increase in labour costs, a rise in cost of construction materials due to higher utilisation of materials and higher sub-contracting costs, among others.

Earnings per share in Q2 was 1.61 Singapore cents, up from 0.81 cent a year ago.

As at end June, net tangible asset per share came in at 38.29 Singapore cents, up 4.8 per cent from 36.54 cents as at end December 2016.

The group said its net profit margin went up from 10.4 per cent in Q2 2016 to 14.4 per cent in Q2 2017.

In its outlook, the group said the operating environment "remains challenging as the sector continues to face keen competition".

It said that as at end June, its net construction order book amounted to S$299 million, with projects extending till 2019.

The group also said "it is very saddened by the unfortunate and regrettable incident at the Pan-Island Expressway exit to Tampines Expressway on July 14, 2017". It added that it is working closely with the authorities on the on-going investigations into the incident and that it would continue to provide all necessary assistance and support to ensure that the needs of the deceased's family and the other affected workers were fully taken care of.

The company had called a trading halt on July 14 after a viaduct under construction at its subsidiary, Or Kim Peow Contractors' worksite collapsed, claiming the life of one worker and injuring 10 others. The accident took place early Friday morning at about 3.30am near the Pan Island Expressway exit to the Tampines Expressway.

The stock closed up half a cent at S$0.37 on Monday.