EMS Energy's full-year net profit down 81%

Singapore

ENGINEERING solutions provider EMS Energy's net profit for the full year ended Dec 31, 2014, came in at S$825,000, less than a fifth of what it made in its previous financial year.

While the company's gross profit soared 46.3 per cent to S$6.1 million, its gross profit margin declined to 12.5 per cent, from 19.8 per cent, due to more expensive materials and higher costs resulting from a shortage of skilled workers.

Revenue for the 12 months more than doubled to S$48.8 million, compared with S$21.1 million in FY2013, thanks to an increase in work done for projects secured, particularly a US$36 million project for Derrick Equipment (DES).

Earnings per share came down to 0.08 Singapore cent, from 0.40 Singapore cent previously. The net asset value per share stood at 2.54 Singapore cents as of Dec 31, 2014.

In releasing its full-year results last Friday, EMS also announced that it had secured a second Derrick Equipment contract, which lifted the company's order book to S$67 million.

The company is also in talks to secure a third repeat DES contract from its parent company, Koastal Industries, and a separate DES contract from a third party.

Ting Teck Jin, the executive chairman and CEO of EMS, said: "Securing the second DES contract underscores the group's capabilities and ability to deliver as we pursue larger, higher-value projects with better margins."

He added that although the operating environment remained a challenging one amid falling oil prices and a tight labour market, the company planned to leverage on its strengths and track record to deliver large-scale projects.

Construction on EMS's new waterfront facility in Tuas began last November. Once ready, it will result in "substantial" cost savings and provide greater capacity to take on higher-value projects and provide integrated marine services, EMS said in a statement.

Mr Ting added that the company is also on the lookout for strategic alliances or possible mergers and acquisitions, and exploring other activities in lower-cost countries such as Vietnam and China.

The counter remained unchanged at two cents last Friday.