Nam Lee H1 profit plunges 97% to S$125,000 on slower progress, reduced production

NAM Lee Pressed Metal Industries posted a 97 per cent drop in net profit to S$125,000 for the half year ended March 31, from about S$4.1 million a year ago.

Its gross profit fell due to slower progress of projects and a reduction in production output, while its other operating expenses rose due to a fair value loss on derivatives of S$1.7 million for the half year, compared to a loss of SS$0.2 million for H1 2019, the fabricated metal producer and supplier said in a regulatory filing on Monday.

Earnings per share stood at 0.05 Singapore cent for the half year, down from 1.7 cents a year ago.

Revenue for the half year fell 12 per cent to about S$58.1 million, from about S$66 million a year ago. This was due to a fall in revenue from the company's aluminium segment after its factories in Malaysia closed from March 18 due to the Covid-19 pandemic-triggered movement control order in the country.

These factories subsequently applied for waivers, and in the following months were allowed to resume operations in phases, gradually resuming full operations, Nam Lee said.

It added that its factories and project sites in Singapore were not allowed to continue operations as part of "circuit-breaker" measures to contain the spread of the novel coronavirus.

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Even after the these measures eased on June 1, construction activities could only resume in gradual phases, with strict safe-distancing measures to be observed, it said.

These project delays would "inevitably increase operating costs", Nam Lee added. It said it is receiving wage support, government rebates and waiver of levies to defray some of these costs.

Nam Lee said the group will continue to face challenges in the short term as a result of the Covid-19 pandemic, and expected its full-year revenue to be lower than the previous financial year's.

No dividend was declared for the half year, versus a dividend of 0.5 cent a year ago. Nam Lee said no dividend was declared on the grounds of prudency.

Shares of Nam Lee were trading at S$0.30 as at 9.09am on Tuesday, down S$0.01 or 3.2 per cent.