Deluge posts 85.7% rise in net profit in maiden results, declares interim dividend

[SINGAPORE] Fire-protection specialist Deluge Corporation reported an 85.7 per cent year-on-year increase in net profit to S$8 million for the six months ended Sep 30, in its maiden financial results since its October listing on the Singapore Exchange (SGX) mainboard.

The group also declared its first interim dividend of 1.35 Singapore cents a share, amounting to about S$2 million, or about a quarter of its profit attributable to shareholders for the period.

In announcing its results on Friday (Nov 13), Deluge said revenue rose 33.6 per cent to S$67.2 million for the first half of FY2027, from S$50.3 million in the corresponding period in the year before.

Gross profit grew 35.8 per cent to S$21.3 million, while profit before tax more than doubled to S$9.7 million, up 113.4 per cent from S$4.6 million previously.

The stronger performance was mainly driven by higher revenue recognition from ongoing projects, as well as improved margins from projects in its Integrated Projects segment, the group said.

Revenue from this segment rose 54.9 per cent to S$49.1 million, from S$31.7 million the year before. Its profit before tax grew to S$9 million from S$1.2 million, supported by higher revenue recognition from projects that generally carried higher margins, Deluge said.

THE BUSINESS TIMES INSIGHTS

Powering Asean's Future 2026

Find out how enterprises are navigating power constraints and sustainability targets

ACCESS THE INSIGHTS

The group’s overall gross profit margin rose to 31.7 per cent, from 31.2 per cent in the corresponding period last year.

Revenue from its Lifecycle Services segment fell 3.9 per cent to S$16.6 million, mainly due to the timing and scheduling of maintenance works, the group said. This segment recorded profit before tax of S$3.9 million.

Revenue from its Products Distribution segment rose 12.5 per cent to S$1.6 million, mainly driven by higher customer demand during the period.

SEE ALSO

Deluge shares close 6.7% higher on first day of mainboard listing

Fire-safety specialist Deluge Corp aims to raise S$23 million in IPO at S$0.60 a share

Excluding the one-off initial public offering expenses of about S$940,000 recognised during the period, the group’s adjusted net profit after tax would have been about S$8.7 million.

As at Sep 30, Deluge’s order book stood at S$440.6 million. The group said it had secured S$129.2 million in new contracts since January.

Executive director and group chief executive Lee Wai Wah said the group would continue to strengthen its operational capabilities while focusing on project execution and sustainable profitability.

“Malaysia will also be an important part of our growth strategy as we explore strategic acquisitions and partnerships,” he added.

The group plans to expand its operational presence and facilities in Malaysia, including through strategic acquisitions, joint ventures and partnerships to complement its existing businesses.

Despite higher earnings, net cash generated from operating activities fell to S$1.4 million in the first half of FY2027, from S$9.3 million in the year before.

Deluge attributed this decline mainly to increased working capital requirements, particularly higher trade and other receivables, advance payments to suppliers and contract assets arising from ongoing project activities.

The group also recorded a net cash outflow of S$5.1 million during the period, leaving it with S$8.9 million in cash and cash equivalents as at Sep 30.

The company expects demand for fire-protection systems and related engineering services to remain supported by infrastructure development, industrial activities and fire-safety requirements in its key markets.

However, the group said competitive tendering conditions, rising labour costs, fluctuations in material prices and project execution risks could crimp operating margins and profitability.

Barring unforeseen circumstances, the board said it is cautiously optimistic about the group’s prospects for the next 12 months.

Shares in Deluge closed flat at S$0.61 on Friday after the announcement.