BRC Asia posts 12.2% drop in Q1 net profit
Sharon See
STEEL solutions provider BRC Asia reported a net profit of S$11.7 million for the first quarter ended Dec 31, 2022, a fall of 12.2 per cent from the year-ago period.
Revenue for Q1 fell 4.5 per cent to S$341.2 million, the company said in a business update on Wednesday (Feb 8).
As at Dec 31, its sales order book stood at about S$1.4 billion, with duration of projects ranging up to 5 years, subject to further changes.
The company said the continued recovery of the construction industry in Singapore bodes well for its supply chain, including reinforcing steel.
But in the short term, the industry faces multiple challenges of escalating costs, particularly for labour and energy, as well as slower-than-usual site progress resulting in lower-than-expected contractual offtake.
“Slower offtake is also driving more intense competition for new contracts, compressing margins as firms in the industry strive to overcome the shortfall in delivery volumes,” said the company.
“Looking ahead, we continue to believe that once the kinks are ironed out, the local construction sector would push ahead to fulfil the substantial number of projects that remained to be completed.”
The company noted that while Singapore’s construction industry grew by 6.5 per cent in 2022, its value-added remained 19.3 per cent below pre-pandemic levels.
BRC Asia shares fell 1.06 per cent, or S$0.02, to close at S$1.86 on Wednesday.
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