Boustead Projects Q3 profit more than doubles to S$7.2m

BOUSTEAD Projects' net profit more than doubled to S$7.2 million in its fiscal third quarter on wider gross margins.

The industrial real estate engineering and construction group said that net profit for the three months ended December 2015 rose 165 per cent from S$2.7 million in the year-ago period. On a per-share basis, quarterly profit was 2.2 Singapore cents.

Nine-month profit was up 4 per cent at S$17.5 million, or 5.5 Singapore cents per share.

Boustead Projects shares closed at 64.5 Singapore cents on Wednesday, lower by 5.1 per cent or 3.5 Singapore cents, before the results were announced.

Revenue during the quarter actually fell 14 per cent to S$85.6 million, but cost of sales dropped by a sharper 25 per cent to S$66.2 million, which helped the company to post an 83 per cent increase in gross profit, to S$19.4 million.

The bulk of the improved margins came from the design-and-build business, which suffered from an unusually low-margin project in the year-ago period, Boustead Projects said.

Looking ahead, the company expects weaker occupancy rates for industrial space in the next two years, but does not expect a significant impact on the profitability of its leasing business in the next 12 months. Boustead Projects' order book backlog stood at S$179 million as at the end of 2015, and the company expects to "deliver a reasonable level of profit" in fiscal 2016.