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Nordic Group posts 40% drop in Q1 profit to S$2.1m, bags S$5.7m of contracts

PRECISION engineering and systems integration solutions provider, Nordic Group, on Friday posted a 40 per cent slide in net profit for its fiscal first quarter, on the back of lower revenue from its project services business.

Net profit for the three months ended March 31, 2019 stood at S$2.1 million, compared with a net profit of S$3.4 million in the year-ago period.

The results translate to an earnings per share (EPS) of 0.5 Singapore cent, against EPS of 0.9 Singapore cent previously.

No dividend has been recommended, unchanged from the preceding year.

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Revenue fell 14 per cent to S$19.5 million, as earnings from its project services segment slipped 27 per cent, or S$3.6 million, to S$9.7 million, due to fewer projects being delivered. Nonetheless, this was partially offset by a 5 per cent, or S$440,000 revenue increase to S$9.8 million from the group's maintenance services segment.

Looking ahead, Nordic Group said its businesses, which largely serve the marine, oil and gas industries, "remain challenging".

"Amidst persistent weak oil prices, fluctuations in the exchange rate of the US dollar against the Singapore dollar, and the uncertainty in the economies due to the trade war between the US and China, the group's growth will be affected," the company said.

Still, the group is optimistic that it will continue to deliver value to shareholders with its contract wins secured to date, opportunities for further mergers and acquisitions, as well as prudent costs and risk management initiatives, it said.

It added that the group remains positive over the long-term prospects in the industries it operates in.

In a separate regulatory filing on Thursday night, Nordic Group also noted that it has clinched about S$5.7 million worth of contracts, with both new and repeat customers.

As at 10am on Friday, shares in Nordic Group were trading at S$0.275, down 6.8 per cent, or two Singapore cents.