King Wan Corp H2 net profit down by 30.1% to S$690,000

MAINBOARD-LISTED building services company King Wan Corp expects the mechanical and electrical (M&E) business to be sustainable in the year ahead, despite a challenging industry outlook, the management said in second-half financial statements on Thursday night.

This comes even as net profit fell by 30.1 per cent year on year to S$690,000 for the six months to March 31, on a lower recognition of profit from its share in a private home project. Revenue was down by 8.2 per cent to S$37.7 million, on a smaller volume of ongoing M&E contracts.

Earnings per share for the half-year was 0.2 Singapore cent, up from 0.28 Singapore cent in the same period the year before.

Net asset value came to 16.05 Singapore cents a share, against 19.98 Singapore cents a share before, which the group attributed to a net fair-value loss on investment in equity securities carried at fair value through other comprehensive income.

For the 12 months, net profit shrank by 69.1 per cent to S$733,000, while revenue came in lower by 10.4 per cent, at S$71.1 million.

King Wan cited rising cost pressures and uncertainties over economic recovery as headwinds to M&E engineering in the next 12 months, even as Covid-19 restrictions are eased.

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But it added that the M&E segment will remain its core business "and continue to generate an income stream that is sustainable", with about S$189.6 million of contracts as at end-July.

The group had clinched S$28.9 million in new M&E projects in Singapore in the January-to-June period alone, King Wan said in a separate announcement.

These include retrofitting works at the Sun Yat Sen Nanyang Memorial Hall, and plumbing, sanitary and gas works for a temporary workers' dormitory with 5,000 residents in Tampines.

"The group has maintained its versatility in undertaking M&E projects that require different skill sets," managing director Chua Eng Eng said in a statement, while adding that the order book "has provided high revenue visibility" for King Wan.

No dividend was recommended, unchanged from the year prior - a decision that the board said was made "as cash is prioritised for use in the group's operations in the current economic climate".

King Wan shares closed up by 0.4 Singapore cent, or 5.71 per cent, to 7.4 Singapore cents on Thursday, before the results were released.