Civmec's Q4 profit drops 35.4% to S$956,000

Singapore

A SHARE in the loss of a joint venture along with higher administrative expenses dented results for Civmec for its fourth quarter.

The Australia-headquartered construction and engineering services company for the oil and gas, metals and minerals, infrastructure and defence sectors said that the higher administrative costs reflected the group's investment in securing large engineering, procurement, and construction projects.

Net profit dived 35.4 per cent to S$956,000 from the year-ago period. For the three months ended June 30, revenue rose 10.5 per cent to S$97.7 million from the previous year.

Earnings per share fell to 0.19 Singapore cent from 0.26 cent in the year-ago period. Net asset value per share rose to 34.95 cents as at June 30, from 32.11 cents a year ago.

The firm has recommended to maintain a cash dividend of 0.7 cent per share, subject to shareholders' approval; it will be paid on Dec 14, 2017.

For the full year, the company posted a 51.7 per cent drop in net profit to S$8.4 million, on a 12.8 per cent drop in revenue to S$346 million.

Chief executive officer Patrick Tallon said: "We have remained profitable during difficult market conditions and continued to invest significant resources in establishing a solid platform for the coming year."

The steepest drops in revenue were seen in the oil-and-gas and infrastructure sectors.

Revenue for the former fell 40.4 per cent to S$54 million, reflecting the significant downturn in the oil and gas sector as major capital investment projects were completed, it said. However, gross profit in the sector increased 70.7 per cent to S$13 million in FY2017.

"Market conditions in the oil and gas sector are not expected to change in FY2018 and will continue to be challenging," the company said.

Revenue for the infrastructure sector declined 26.1 per cent to S$100.6 million as major infrastructure projects secured in prior years were completed. Gross loss for the sector was S$202,000, compared to a gross profit of S$10 million a year ago, reflecting the competitive market conditions in this sector, it said.

Civmec shares finished flat at 60 cents on Tuesday.