BRC Asia posts full-year net profit of S$47m

STEEL reinforcement solutions provider BRC Asia has posted a full-year net profit of S$47 million, up 131 per cent from a year ago, on improved sales volume and higher steel prices.

The group has proposed a final dividend of 4 cents per share and a special dividend of 4 cents per share.

Including the interim dividend paid out earlier in the year, total dividend for FY2021 stands at 12 cents per share, representing around 61 per cent of earnings.

For the 12 months ended Sept 30, revenue rose 91 per cent to S$1.2 billion mainly due to higher sales volume with the pick-up in construction activities, coupled with higher selling prices in tandem with increasing international steel prices, said the group in a bourse filing on Monday (Nov 29).

Earnings per share came in at 19.58 cents, up from 8.72 cents a year ago.

Gross profit increased 24 per cent to S$82.1 million year on year while gross profit margin fell from 10.8 per cent to 7 per cent primarily due to provision for "onerous contracts" of S$45.3 million recorded in FY2021, compared with a reversal of S$6.4 million in FY2020.

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Other income was up 23 per cent to S$12.3 million due to an increase in foreign exchange gain coupled with gains from fair value changes on derivatives, which were partially offset by a decrease in government grants.

BRC's order book stood at S$1.2 billion as at Sept 30.

It is expecting "moderately more stable" worksite activity levels in the next 3-6 months but the pace of work would still be weighed down by an "absolute shortage" of foreign labour.

That said, the pace of work is expected to gradually pick up on the back of a more abundant foreign labour situation, as builders rush to fulfil the sizeable number of construction contracts that had been awarded during the last 15 months, said the group.

Amid the pandemic, HDB has exceeded pre-Covid Build-To-Order flats being launched in 2021, which is a "good assurance" for the demand of reinforcing steel and BRC's role in the local construction supply chain.

"Even though the labour shortage situation is likely to continue for a while more, and credit risk concerns remain prevalent in our sector, we are optimistic of navigating safely through the uncertain times that are still ahead of us," said BRC Asia CEO Seah Kiin Peng.

Shares of BRC Asia closed up 1 cent or 0.7 per cent to S$1.50 on Monday.