BRC Asia Q3 profit up 10.9% to S$22.6 million even as revenue slides
Uma Devi
STEEL solutions provider BRC Asia had a stronger bottom-line showing for its third fiscal quarter ended June. The company on Friday (Aug 4) posted a profit after tax of S$22.6 million for the quarter, up 10.9 per cent from S$20.4 million reported in the year-ago period.
This took the company’s nine-month net profit figure to S$48.8 million versus S$60.2 million last year, the company said in a business update.
The stronger profit for Q3 came despite a 10.8 per cent drop in revenue to S$459.8 million.
As at end-June, the company’s sales order book stood at about S$1.3 billion. It said the durations of the projects in its order book range up to five years, but may be subject to further changes.
BRC Asia said that, following the Covid-19 pandemic, the local construction sector has been well-supported by strong demand.
It added that, according to the Building and Construction Authority (BCA), total construction demand for 2022 reached S$29.8 billion, which was within the authority’s earlier forecast of S$27 billion to S$32 billion, and similar to the S$29.9 billion recorded in 2021.
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For 2023, the BCA projects that total local construction demand would range between S$27 billion and S$32 billion, and the public sector is expected to make up 60 per cent of this demand.
The company said that while strong local demand “bodes well” for steel reinforcers and BRC Asia, the recent business failures of some main contractors are “a stark reminder” that there are still loss-making construction projects that began before the pandemic and are still uncompleted.
“(These projects) continue to test the financial resilience and mettle of their builders severely,” said the company. “In this regard, BRC Asia will continue to exercise robust due diligence to minimise our exposure.”
Shares of BRC Asia rose 0.6 per cent or S$0.01 to close on Friday at S$1.67 on a cum-dividend basis.
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