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Boustead Projects' Q4 profit falls 59% on absence of one-off gain

MAINBOARD-LISTED Boustead Projects booked a 59 per cent slide in its fiscal fourth-quarter profit to S$5.81 million on the absence of a one-off gain a year earlier.

The one-off gains in Q4 2017 stemmed from compensation for AusGroup's early lease termination at its 36 Tuas Road property and the sale of Boustead Project's interest in TripleOne Somerset.

Earnings per share for Q4 was down to 1.8 Singapore cents, from 4.5 Singapore cents a year earlier.

The group's board is proposing an ordinary dividend of 1.5 Singapore cents per share, to be paid out on Aug 17, 2018.

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Revenue for the three months ended March 31, 2018 was S$57.64 million, up 50 per cent, due to higher revenue contributions from its design-and-build business, said Boustead Projects.

Boustead Projects is involved in the design-and-build and development of industrial facilities for multinational corporations and local enterprises, and is a 53 per cent-owned subsidiary of fellow mainboard-listee Boustead.

Revenue from its design-and-build business in Q4 rose 64 per cent year-on-year to S$49.9 million, due to greater revenue converted from contracts secured during fiscal 2018 compared to the previous corresponding period.

Its leasing business contributed 4 per cent lower revenue in Q4 2018 to S$7.8 million, mainly due to the lease expiry of 85 Tuas South Avenue 1 in January 2018 and lack of contribution from 36 Tuas Road due to AusGroup's early lease termination in Q4 2017, which was partially offset by contributions from new leases, and development management fees from the Boustead Development Partnership.

Overall for fiscal year 2018, the group clocked 19 per cent lower profit attributable to equity holders of S$29.15 million, on the back of S$201.34 million in revenue, which retreated 12 per cent from the year ago, dented by lower revenue contributions from both the design-and-build and leasing businesses.

Cash and cash equivalents for the same period stood at S$111.4 million.

Boustead Projects' managing director Thomas Chu cautioned that competition is expected to remain "intense" in construction and industrial real estate in Singapore.

"Nonetheless, we are cautiously optimistic that our market leadership and financially sound position, combined with our strong business development efforts, will allow us to capitalise on opportunities in our growing design-and-build and real estate development enquiry pipelines both in Singapore and overseas.

"We will also continue to invest in smart and eco-sustainable building capabilities, drive cost and productivity improvements, and intensify our efforts in securing strategic partnerships and M&A (mergers and acquisitions) targets that could support our market expansion and extend our capabilities," he added.

Boustead Projects added it expects to deliver a "healthy level of profit" in fiscal 2019, continue to pursue its long-term strategy of expanding and growing its design-and-build business regionally, and increase its portfolio of income generating properties.

Its counter closed on Friday unchanged at S$0.81 apiece.

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