Boustead Projects FY2022 earnings fall 91% on absence of one-off gain

REAL-estate solutions provider Boustead Projects : AVM 0% reported a 91 per cent fall in earnings to S$11.3 million for FY 2022 ending Mar 31, down from S$131.7 million the year before, as a result of the absence of a one-off gain.

The board of directors, upon the release of the company’s earnings results after market close on Wednesday (May 25), are proposing a final dividend of S$0.002 per share and a special dividend of S$0.008 per share, subject to shareholders’ approval.

At the end of FY2021, the company had sold its interest in 14 properties to Boustead Industrial Fund (BIF), netting a one-off gain of S$134.8 million. The absence of this one-off gain would have resulted in a loss of S$3.2 million for FY2021.

Thomas Chu, managing director of Boustead Projects, said: “Having worked through several large projects secured pre-pandemic with little margin for error, we are expecting to exit from the pre-pandemic backlog and be poised for a gradual recovery.”

Revenue grew 13 per cent year on year to S$339.1 million from S$301.4 million on higher recognition on engineering and construction (E&C) projects in H1 FY2022 ending Sept 30. Total other income for FY2022 was 115 per cent higher at S$7.2 million from S$3.5 million, due to interest income derived from notes issued by BIF.

Wong Yu wei, executive deputy chairman of Boustead Projects, said: “We are increasingly building up our recurring income streams with successful execution of asset ownership, asset management and fund management, and look forward to our various real-estate platforms delivering growth, improving resilience and transforming our business to be less reliant on traditional E&C activities.”

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Boustead Projects’ FY2022 earnings per share fell to S$0.036 from S$0.423 due to the absence of the one-off gain. *see Amendment note

The company’s order backlog stood at about S$253 million as of Mar 31, 2022, but Boustead Projects warns of margins for future E&C projects being under pressure. Rising labour costs, construction material and supply chain costs stemming from the economic and political environment, inflation and lingering effects of the pandemic continue to weigh on margins.

Wong said: “In view of the progress of the E&C Business, Real Estate Business and addition of full-fledged fund management activities, we expect to remain profitable for FY2023, barring unforeseen circumstances and further disruptions caused by the pandemic. We have built a stable foundation that offers multi-faceted resilience in Singapore and the region, and are well positioned to actively pursue multiple opportunities in the future.”

Shares of Boustead Projects closed up 0.5 per cent or S$0.005 to S$0.935 on Wednesday.

*Amendment note: An earlier version of the story said that the earnings per share fell to S$0.0036 rather than S$0.036