CSE Global H2 earnings fall to S$0.2m on restructuring costs, project overruns
Uma Devi
TECHNOLOGY solutions provider CSE Global posted a profit of slightly over S$0.2 million for the second half of 2022, down from earnings of S$4.9 million in the corresponding period in 2021.
The company attributed the disappointing profit figures to the restructuring of one of its business divisions in the US which led to a one-off restructuring cost of S$1.3 million, as well as a loss of S$5.9 million due to cost overruns in two projects, where the costs to execute these were under-accounted for.
Revenue for H2 was up 26.2 per cent to S$295.5 million on the back of growth in project and time and material revenues across all geographic regions.
However, the company said supply chain disruptions continue to affect the operations. The increased cost of project execution and cost overruns for some projects had resulted in lower gross margin, particularly in the Americas region.
CSE Global’s board of directors has recommended a final dividend of S$0.015 per share for H2, unchanged from the final dividend in 2021.
If approved by the company’s shareholders at the annual general meeting on Apr 20, the dividend will be paid out on May 18.
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For the full year, CSE Global’s earnings fell 68.2 per cent to S$4.8 million. Revenue was up 19 per cent to S$557.7 million mainly due to growth in infrastructure project revenues in Australia and the Americas region.
Segmentally, the group’s infrastructure sector secured S$341.5 million of new orders in FY2022, compared to S$147.7 million in FY2021. The energy sector booked S$402.9 million worth of new orders versus S$265.7 million in FY2021. The mining and minerals sector clinched S$64 million worth of new orders, versus S$48.7 million in FY2021.
As at December last year, CSE Global’s order book stood at S$480.1 million.
“While CSE Global saw significant growth in new orders received during the year, our margins have been impacted by an increase in project execution costs due to ongoing supply chain disruptions and project cost overruns,” said Lim Boon Kheng, managing director of CSE Global.
“Looking ahead, we will be laser-focused on integrating our latest acquisitions and executing backlog orders while closely monitoring our costs.”
Shares of CSE Global closed flat at S$0.35 on Monday (Feb 27).
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