Civmec H2 net profit rises 4.4% as gross profit margin improves

CONSTRUCTION and engineering services provider Civmec reported on Monday (Aug 28) a 4.4 per cent rise in net profit to A$29.4 million (S$25.6 million) for the half-year ended Jun 30, 2023, up from the A$28.2 million it posted for the corresponding period the year before.

This was despite a 1.9 per cent fall in revenue to A$412 million for the period, from A$419.9 million in the year-ago period.

The group attributed the rise in net profit to increased gross margins in the period, which rose to 13.9 per cent year on year, from 11.6 per cent for the half-year before.

The group also recognised a 12.5 per cent year-on-year increase in other income to A$2.1 million, due to interest income, fuel tax credits, gain on disposal of plant and equipment, as well as gain on disposal of the group’s interest in Civtec Africa.

Civtec Africa operates in Uganda, and is also a construction and engineering services provider.

Earnings per share for the period stood at A$0.0583 for the period, up from A$0.0561 a year ago.

For the full year ended Jun 30, 2023, net profit grew 13.7 per cent year on year to A$57.7 million, while revenue grew 2.7 per cent to A$830.9 million.

The group has proposed a final dividend of A$0.03 per share, which is subject to approval at its upcoming annual general meeting. This is up from the final dividend of A$0.02 per share that was declared for the same period a year earlier.

Civmec said that the group recorded healthy cash flow from operations of A$122.8 million for the full year, compared to its earnings before interest, tax, depreciation and amortisation (Ebitda) of A$109.1 million, which enabled it to finish the year in a net cash position of A$13.9 million.

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It has a number of projects that are underway as well. These include its covalent lithium refinery, where site work is nearing the peak of activity with the completion of manufacturing works, as well as the commencement of work on the Western Ranges project for mining group Rio Tinto.

The group added that opportunities “remain plentiful” for it to replenish its order book, which amounted to A$1.1 billion as at Jun 30, 2023, up 10.6 per cent year on year.

Civmec shares closed up 2.5 per cent or S$0.02 at S$0.815 on Monday, before the results were released.