CSE Global new orders rise 68.3% in Q4, but expects ‘significantly lower’ net profit for H2
TECHNOLOGY solutions provider CSE Global secured S$220.8 million worth of new orders in its fourth quarter ended Dec 31, 2022, up 68.3 per cent from the same period a year earlier.
This was mainly attributable to higher orders secured in the US and Singapore, particularly from the infrastructure sector, the company said in a bourse filing on Wednesday (Feb 15).
Some S$131 million of new orders were secured by the group’s infrastructure sector, as compared to S$32.1 million in the same period in 2021. This was mainly due to a multi-year system maintenance contract secured from the Singapore government, as well as higher orders secured for the wastewater market in the Americas region, the company said.
Meanwhile, new orders for the group’s energy sector fell 8 per cent on year to S$78.7 million, while new orders for its mining and minerals sector fell 17.8 per cent on year to S$11.2 million, mainly due to delays in the award of radio communication projects in Australia.
Lim Boon Kheng, group managing director of CSE Global, said infrastructure remains a key focus area for the company, and noted that the strong growth in new orders secured for the sector is likely a result of the company’s efforts to diversify its business.
“That said, the continued supply chain disruptions are expected to prolong project execution timeframes and have an impact on our gross margins,” he added.
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In a separate filing, CSE Global said it expects to report significantly lower net profit for its second half (H2) of FY2022, following a periodic review of its various business operations around the world.
In H2, the company restructured a business division in the US and incurred a restructuring cost of S$1.3 million. It also recorded a loss of S$5.9 million after the restructuring, due to cost overruns in two projects as a result of under-estimation.
CSE Global noted that it continued to execute its diversification strategy in FY2022. While this resulted in an increase in new orders and lowered revenue exposure from customers in the energy segment, the diversification has increased the company’s overhead costs and lowered its profits for the year.
The company said it still expects to report an overall net profit for the full year ended Dec 31, 2022. It will release its unaudited consolidated financial results for the second half and full year on or before Feb 27, 2023.
Shares of CSE Global closed 1.3 per cent lower at S$0.375 on Wednesday, before the announcements were made.
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