BRC Asia posts S$12m full-year profit on Lee Metal acquisition

THE completed acquisition of Lee Metal by BRC Asia boosted BRC Asia's net profit for its full fiscal year, the seller of reinforcing steel bars said on Friday.

But looking ahead, the firm warned of subdued profit margins, given the "mixed picture" for the reinforcing steel industry.

BRC Asia said net profit for the 12 months ended Sept 30, 2018 stood at S$12 million, a jump from the S$1.81 million in net profit that was posted in the same period a year ago.

Its earnings per share from its continuing operations stood at 5.57 Singapore cents, up from 0.972 Singapore cents a year ago.

In July 2018, the group completed the acquisition of Lee Metal, another fabricator and distributor of steel products in Singapore.

Consequently, revenue rose 83 per cent to S$567 million, boosted as well as by the increased steel sales tonnage delivered and higher steel price compared to fiscal 2017.

BRC Asia said that although the multi-year decline in construction demand may have bottomed out, its improvements have been "moderate rather than clear and strong".

It noted in particular that the new property curbs introduced by the government in July had "greatly dampened" the surging collective sales market.

"This, coupled with the unexpected decline in public sector residential supply, negatively impacts the prospects of the reinforcing steel industry at this point in time," it said.

"We expected profit margins to remain subdued, as the group, which now includes Lee Metal, is working hard to fulfil the projects that had been taken during the construction industry downturn over the last few years."

Shares of BRC Asia closed on Friday at S$1.34, up one Singapore cent.