OKP Q3, nine-month net profit hurt by higher costs

INFRASTRUCTURE and civil engineering company, OKP Holdings, on Monday reported a 2.4 per cent drop in net profit attributable to equity holders of S$281,000 for the third quarter ended Sept 30, while revenue rose a marginal 0.8 per cent to S$26.2 million.

Earnings per share was flat at 0.09 Singapore cents for the quarter.

The latest results brings its nine-month net profit to S$1.69 million, a 49.9 per cent drop year-on-year, despite an 8.3 per cent increase in revenue to S$83.8 million.

This was due to higher administrative costs and lower gross profit amid a competitive pricing environment, it said.

The higher cost of works it incurred was a result of higher labour, sub-contracting and construction material costs.

"The business operating conditions for the construction industry is expected to remain challenging due to increasing business costs and the prevailing labour crunch situation in Singapore.

"With the implementation of government policies and legislation involving foreign worker hires, the industry also faces the issue of experienced and skilled manpower shortage.

"Despite the difficult conditions in the construction industry, we remain optimistic as we are supported by a pipeline of projects within our core businesses in construction and maintenance work with a net construction order book of S$186.8 million extending to 2017," it said.