ISOTeam Q2 earnings slide 29.5% to S$1.3m

CONSTRUCTION company ISOTeam has reported a 29.5 per cent decrease in Q2 net profit to S$1.3 million for the three months ended Dec 31, 2018. This was down from S$1.9 million the year before.

Net profit was down 37.4 per cent at S$2.1 million for the six months ended Dec 31, from S$3.4 million the year before. The decline was mainly due to reduction in government grants received, as well as higher finance costs associated with the financing for the purchase of the group's current office building, ISOTeam said.

Earnings per share (EPS) stood at 0.47 Singapore cent for the second quarter, down from 0.67 cent the year before. For the first half, EPS was at 0.75 Singapore cent, down from 1.2 cents the year before. No dividend was declared for the quarter.

Meanwhile, revenue for the second quarter was at S$45.9 million, up 93.1 per cent from S$23.8 million the year before. For the first half, revenue was at S$73.1 million, up 49.7 per cent from S$48.9 million the year before.

ISOTeam also said its order book as at Jan 31, 2019 remained strong at S$132.8 million, expected to be delivered over the next two years. This includes the awarding of a second Home Improvement Programme (HIP) project worth S$26.3 million after the award of its first HIP project in 2017.

"The number of old flats in Singapore is increasing and the government spending on HIP programme is expected to be increased. The group is expecting to gain more business opportunities from this programme due to its track record," it added.

The company has also been awarded a floating solar installation project worth S$11.3 million by Sunseap Leasing, the success of which is expected to open up similar opportunities in Singapore as well as around the region. Meanwhile, ISOTeam's repairs and redecoration (R&R) segment has seen improvement having won "a few sizeable projects" worth an aggregate S$9.8 million recently, the company said.

Anthony Koh, ISOTeam executive director and CEO, said that efforts to adapt the company's strategy in response to changes in the operating landscape "has paid off", as seen by stronger contributions across all segments compared with the previous quarter.

"We have also made progress on the cost front, having previously articulated our desire to increase efficiency and lower costs by consolidating our various operational and administrative functions under one roof at our current office premises. The expected cost savings are now beginning to materialise gradually," Mr Koh said.

He added that looking ahead, the company is expecting to "realise greater savings" as it continues to look for ways to optimise resources.

Although the market is likely to remain challenging, the company said it will continue to leverage its strength to secure more projects for sustainable growth in the long term.

Shares for ISOTeam closed at S$0.22 on Wednesday before its results were announced.

Amendment note: An earlier version of the article incorrectly stated that ISOTeam's remove and replace (R&R) segment saw improvement having won "a few sizeable projects" worth an aggregate S$9.8 million, when it fact it was its repairs and redecoration segment. The article has been revised to reflect this.