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Mun Siong Engineering posts Q4 net loss, cuts dividend

MAINBOARD-LISTED turnkey solutions provider Mun Siong Engineering sank into the red in the fourth quarter on less work and lower revenue, according to results released on Thursday.

The company reported a net loss of S$2.88 million for the three months to Dec 31, against earnings of S$698,000 previously, as revenue fell by 9.5 per cent year-on-year to S$12.9 million.

Loss per share was at 0.5 Singapore cent against earnings per share of 0.12 Singapore cent previously.

Mun Siong reported a full-year net loss of S$3.77 million, compared with a net profit of S$2.17 million before. Revenue for the 12 months was down by 14.5 per cent to S$62.9 million, which the group attributed to "lower job volume in view of the continued weak market conditions" and "management seeking projects that will contribute neutral or positive margin to the group".

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Official statistics recently showed that Singapore's construction sector shrank 3.4 per cent in 2018.

The board said in its outlook statement that it believes the challenging market conditions will persist in 2019, with key business partners expected to be cautious on capital commitment on rising costs and a global economic slowdown.

But it added that it "will intensify effort (sic) to penetrate new markets", including a potential North American joint venture in oil, gas and petrochemicals, which had been announced earlier. Diversifying the customer base is crucial as the industries it now serves "are dominated by a small number of major players", the board said, citing the impact of a buyer's market on its profitability.

The board has recommended a final dividend of 0.03 Singapore cent a share, down from 0.18 Singapore cent a share for the same period the year prior. It added that future dividend payouts will likely be at similar levels to conserve cash for working capital, business expansion, relocation and other costs.