CSE Global Q1 Ebitda down 22.3% to S$10m on lower revenue

CSE GLOBAL reported earnings before interest, taxes, depreciation and amortisation (Ebitda) of S$10.0 million for the first fiscal quarter ended March, down 22.3 per cent from S$12.9 million in the corresponding quarter last year.

The company attributed the decline to lower gross profits, coupled with an increase in unallocated personnel costs from lower labour utilisation caused by lower business activity.

In its interim business update on Wednesday, the company's revenue for the quarter fell 15.7 per cent to S$111.2 million from S$131.8 million in the year-ago period.

Revenue from the Americas fell 26.7 per cent on the back of slower activities in time and material revenues due to the severe winter weather disruptions in the US.

This was, however, partially offset by a 4.8 per cent growth in the Asia-Pacific region, as well as a jump in revenue from the Europe, Middle East and Africa (EMEA) region to S$3.5 million from S$1.5 million last year.

Segmentally, revenue from CSE Global's infrastructure segment rose 21.1 per cent year on year to S$30.2 million as the group continued to see increased investments in public and critical infrastructure across Australia, Singapore and the UK. There was also a steady demand for power solutions from infrastructure.

Revenue from the mining and minerals segment rose 4.7 per cent year on year to S$11.9 million as rising commodity prices lent support to the segment's activities in Australia. CSE Global said it expects stable demand and growth from this sector.

The energy segment, however, bucked the trend, posting a 27.7 per cent decline in revenue to S$69.1 million in the quarter.

Order intake in Q1 fell 16.5 per cent to S$106.2 million from S$127.2 million in the year-ago period. However, this was an uptick from S$98.4 million in Q4 last year despite the first quarter being a traditionally "slow season".

CSE Global generated cash inflow from operations of S$7.1 million in Q1, and lowered its net debt position to S$37.3 million as at end-March from S$39.0 million at end-December 2020 due to better working capital management.

Looking ahead, the company noted that the current market environment presents "numerous uncertainties" in terms of the Covid-19 pandemic and the global economic outlook.

Lim Boon Kheng, group managing director of CSE Global, said: "Despite the uncertainties in the coming months, the group's prospects remain unchanged per the last outlook presented in February 2021, and it remains confident to achieve a satisfactory financial performance in 2021.

"We will continue to focus on these key markets as well as to expand our engineering capabilities and technology solutions to pursue new market opportunities or diversify into new markets (such as renewables and building automation) brought about by the emerging trends towards urbanisation, electrification and decarbonisation."

Shares of CSE Global closed at 51.5 Singapore cents on Wednesday, down 1 per cent or 0.5 cent.