Pan-United H1 net profit jumps to S$7.3m as construction activities resume

PAN-UNITED, Singapore's biggest producer of ready-mix concrete, on Tuesday posted a first-half net profit of S$7.3 million - from just S$138,000 in the same period a year ago - as construction activities pick up in Singapore.

Revenue for the six months ended June 30, 2021 (H1 2021) came in at S$276.6 million, a 45 per cent year-on-year increase.

The group declared an interim cash dividend of 0.5 Singapore cent per ordinary share, to be paid on Sep 9, 2021.

Earnings per share came in at 0.99 cent, higher than 0.04 cent a year ago.

With the resumption of construction activities in Singapore, Pan-United's concrete and cement (C&C) business saw a 50 per cent jump in revenue to S$272 million, as compared to H1 2020 where construction activities were suspended during the circuit-breaker period.

Trading and shipping revenue, however, came in lower at S$4.6 million in H1 2021 on falling trading volumes, said the group in a bourse filing.

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The raw materials, sub-contract costs and other direct costs had increased in tandem with higher revenue overall.

With the increase in business activities, staff cost including variable compensation expenses and other expenses, such as maintenance and rental, had also normalised to pre-Covid levels, said the group.

It noted that construction activity in 2021 continues to be "healthy" and driven mainly by the public sector. The Building and Construction Authority has projected for Singapore's total construction demand to range between S$23-28 billion this year.

That said, the surge in Delta variant cases and a tightening of border control measures have restricted South-Asian workers from entering Singapore, which exacerbates the manpower shortage issue, said Pan-United.

Supply of raw materials may also be further disrupted if lockdowns in neighbouring countries such as Malaysia and Vietnam are extended.

On Tuesday, Pan-United shares closed 0.5 cent or 1.6 per cent lower at S$0.31 before its results were released.