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Boustead Projects Q3 profit down 15% to S$6.8m

BOUSTEAD Projects saw net profit fall 15 per cent for the third quarter ended Dec 31, 2018 to S$6.8 million, from S$8 million for the year-ago period, the industrial real estate solutions provider announced on Tuesday night after the market closed.

This was despite revenue soaring 70 per cent to S$81.3 million, from S$47.9 million for the year-ago period, which the group attributed to higher design-and-build revenue, partially offset by lower real estate revenue with the lease expiry of 85 Tuas South Avenue 1 in January 2018.

Earnings per share for the third quarter was 2.2 Singapore cents, down 12 per cent year on year from 2.5 Singapore cents.

Boustead Projects said the lower Q3 profit was mainly due to slightly lower gross margins on ongoing projects, lower cost savings from previously completed projects, and an increase in the elimination of its share of unrealised construction and project management profits mainly from joint venture projects. The newly completed ALICE@Mediapolis has also started to incur depreciation expenses, with leasing still in progress.

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The group highlighted that as its revenue is largely derived from project-oriented business, quarterly results may not accurately reflect full-year performance. The latest results took net profit for the first nine months to S$24.9 million, up 7 per cent year on year.

Boustead Projects' current order book backlog stands at S$679 million, with a record S$615 million worth of contracts secured since the start of FY2019.

Managing director Thomas Chu said that a S$242 million contract secured in December with JTC Corporation and a S$200 million contract won in January with Surbana Jurong are expected to contribute significantly to revenue and profitability in the 2020 and 2021 financial years.

Boustead Projects shares closed unchanged at 92.5 Singapore cents on Tuesday before the results.