GKE Corp H1 net profit more than trebles to S$6.52m

CATALIST-LISTED logistics provider GKE Corp more than trebled its first-half net profit, on the back of a concrete production ramp-up, unaudited results on Wednesday showed.

Earnings rose to S$6.52 million for the six months to Nov 30, 2020, up from S$1.81 million before. Revenue increased by 9.2 per cent year on year, to S$60.1 million.

The higher profitability and turnover came as a plant in China churned out more ready-mixed concrete, which was at higher average selling prices, GKE said.

The group also cited improved occupancy of its warehouses in Singapore, with rental rates rising on higher demand, thanks to stockpiling by some of its customers.

Chief executive Neo Cheow Hui said that supply-chain disruptions gave the group opportunities to diversify its customer base, particularly in the healthcare and medical supplies sector, while earnings visibility is stable from longer-term contracts with customers.

He added that strategic investments in Chinese infrastructure goods and services continue "to register strong earnings growth on the back of China's economic recovery".

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The group expects a boost from growing urbanisation in the Chinese market, as its ready-mixed concrete manufacturing facility in Wuzhou city has added a third production line that has brought capacity to 1.2 million cubic metres a year as at end-2020.

Another concrete plant in Cenxi city, with annual production capacity of 400,000 cubic metres, is expected to be completed by the end of next month, while a construction waste recycling plant in Cenxi has started trial production, the group said.

But GKE Corp also warned in its outlook statement that its port logistics and support services could take a hit from Covid-19 disruptions to international trade.

No dividend was recommended, unchanged from the year-ago period.

GKE Corp shares closed at S$0.135, down by 0.4 Singapore cent or 2.88 per cent, before the results were announced.