BRC Asia Q1 net profit falls by a quarter to S$9.6m

Published Wed, Feb 3, 2021 · 08:02 PM

MAINBOARD-LISTED steel-reinforcement solutions provider BRC Asia has reported a 24 per cent decline in net profit for its fiscal first quarter on the back of lower revenue, and provisions.

In a business update on Wednesday, it said that its net profit for the three months ended Dec 31, 2020 fell to S$9.6 million from S$12.7 million in the year before, after recording provisions of S$13.2 million.

The provisions included S$7.9 million for onerous contracts recorded during the quarter, compared to a reversal of S$6.3 million in the year-ago period, from "sharp increases in global steel prices during the quarter".

Earnings per share fell 24 per cent to 4.12 Singapore cents, from 5.45 cents previously.

Revenue for Q1 FY2021 fell 6 per cent to S$213.4 million, mainly due to a reduction in sales volume, as Covid-19 safe-working and management measures continued to result in a slower pace of work for the construction sector, BRC said.

The company's chief executive officer, Seah Kiin Peng, said BRC has been focused on mitigating the negative impact on business arising from Covid-19 for the past year.

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He noted that the group remains in good financial shape, with a recent placement used to repay outstanding bank borrowings, thus strengthening the group's balance sheet.

The group's net asset value per ordinary share rose to 117.23 Singapore cents as at Dec 31, 2020, from 113.38 cents as at Sept 30, 2020. BRC's sales order book stood at approximately S$1.09 billion as at Dec 31, 2020.

Mr Seah added: "In line with Phase 3 of Singapore's re-opening and a national effort to vaccinate the Singapore population, we remain cautiously optimistic towards the recovery of general economic activity and are confident that BRC will navigate through this trying time."

BRC shares rose 1.9 per cent or S$0.03 on Wednesday to close at S$1.61, before the announcement.