Boustead Projects back in the black on resumption of E&C projects

Boustead Projects posted a net profit of S$5.9 million for the first half of its financial year ended Sep 30, 2021, marking a reversal from the S$2.2 million loss it saw in the same period a year ago.

Earnings per share stood at S$0.019 for the half year from a loss of S$0.007 last year.

This comes on the back of surging revenue as the company's bottom line rose by 104 per cent to S$179.1 million in the same period from S$87.7 million the year before.

Boustead Projects attributed the rise in total revenue to more normalised revenue recognition on Engineering & Construction (E&C) projects in H1 FY2022 as such projects were mostly closed in the same period last year while circuit breaker measures were imposed to curb the spread of Covid-19. E&C revenues rose 144 per cent to S$172.8 million in H1 FY2022.

Managing director of Boustead Projects Thomas Chu noted that the operating environment remains challenging for the company's E&C business as he expects additional pandemic-related costs to persist even as Covid-19 measures ease.

Still, he noted that initial signs of recovery have been observed in the business segment. Since the start of FY2022, the company has secured E&C contracts and variations worth about S$75 million with its current order backlog standing at S$280 million.

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"We expect the prospects for the E&C business segment to progressively improve as we complete the last of the pre-pandemic projects by early FY2023 and see better levels of business development opportunities as borders gradually reopen," Chu said.

However, total revenue was partially offset by lower real estate revenue after the sale of interests in 14 leasehold properties to Boustead Industrial Fund in March 2021. Real estate revenue declined 63 per cent to S$6.4 million in the half year ended Sep 30, 2021.

The company also noted its divestment of joint venture development, 351 on Braddell to BIF in October 2021, adding that the divestment is aligned with the company's long-term capital recycling, growth and value-unlocking strategies to enhance stakeholder value over time.

Within the region, the company also noted that while it has signed an option agreement with Khai Toan Joint Stock Company (KTG) to acquire a 49 per cent interest in KBJSC, the holding company for KTG and Boustead Industrial Logistics Joint Stock Company (KBIL), there have been some delays in the process of due diligence. Despite the delays, it expects the transaction to be completed by early FY2023.

Shares of Boustead Projects closed flat at S$0.99 on Thursday (Nov 11), before the financial results were released.