BRC Asia H1 net profit falls 34% on lower revenue
Raphael Lim
STEEL solutions provider BRC Asia reported on Wednesday (May 10) a 34 per cent year-on-year decline in net profit for its first half on the back of lower revenue.
Net profit for the six months ended Mar 31, 2023 fell to S$26.2 million from S$39.8 million in the year-earlier period. On a per-share basis, earnings fell to S$0.0961 for H1 FY23, down from S$0.1465 for H1 FY22. An interim dividend of S$0.05 per share was declared, down from S$0.06 per share a year earlier.
Revenue fell 10 per cent on year in the first half to S$717.1 million, primarily attributable to lower contractual offtake due to slower site progress, BRC Asia said in the bourse filing.
Gross profit fell 23 per cent on year to S$52.7 million, with gross profit margin also declining to 7.4 per cent in H1 FY23 from 8.7 per cent in H1 FY22. The weaker margin was mainly due to lower sales volume of value-added steel products amid slower activity levels within the domestic construction industry.
Other income for H1 FY23 was S$3.7 million, up 42 per cent on year, mainly attributable to net foreign exchange gains, but this was partially offset by a reduction in credit insurance claims for bad debts and government grants.
BRC Asia’s chief executive Seah Kiin Peng said the domestic construction sector was undergoing a “transitional phase” in the first quarter of 2023 where labour shortages were slightly easing and trained migrant workers gradually added to the workforce.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“The local construction sector continued to grow and expand in Q2 FY23 backed by a strong pipeline of construction projects. Even though these improvements have not been reflected directly in our H1 FY23 results, we do believe that these bode well for the overall recovery of the sector,“ he said.
BRC Asia said it has seen a “moderate recovery” in project contractual offtake in April and a normalisation of the prices of key construction materials.
“We remain cautiously optimistic about the uptick of construction and construction-related activities ...” it said. The group’s sales order book of around S$1.4 billion is expected to be progressively delivered in the next 5 years, but this may be subject to further changes.
The group’s net asset value per ordinary share fell to S$1.42 as at Mar 31, 2023, down from S$1.4536 six months earlier.
BRC Asia shares rose 0.6 per cent on Wednesday to close at S$1.65, before the earnings announcement
Copyright SPH Media. All rights reserved.
