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Yongnam's losses narrow in Q3 on higher civil engineering revenue

STEEL fabricator Yongnam Holdings posted a net loss of S$11.1 million in the third quarter, narrowing 19 per cent from a net loss of S$13.8 million in the same period a year earlier.

Excluding operational restructuring costs and the impairment charge on a trade receivable which amounted to S$5.8 million, Yongnam’s net loss would have been even smaller, it said.

Revenue in the three months ended Sept 30 rose 92 per cent to S$65 million, due mainly to higher contributions from the group’s specialist civil engineering and design and build business segments, which offset the low level of strutting and fabrication activities in Singapore and Hong Kong.

Revenue from specialist civil engineering projects jumped 159.9 per cent to S$38.4 million, boosted by higher contributions from the Singapore Changi Terminal 5 project and infrastructural projects in Australia.

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Revenue from design and build projects increased by more than ten-fold to S$9.9 million in 3QFY2019, mainly due to contributions from a four-storey regional headquarters with mezzanine offices and a two-storey production facility located in Tampines Industrial Crescent.

Yongnam said on Monday that it is currently actively pursuing a number of upcoming mega public sector infrastructure projects in Singapore including various major contracts for the North-South Corridor, Changi Airport Terminal 5 development work and Jurong Regional MRT Line.

"The total value of the infrastructure and commercial contracts across the geographical regions of Singapore, Hong Kong and Australia, that the group is currently in active pursuit of, stands at approximately S$1.2 billion. If awarded, most of the potential projects, the bulk of which are in Singapore, are expected to make an impact from FY2020," Yongnam said.

As at Sept 30, Yongnam's order book stood at S$371 million, compared to S$280 million as at Sept 30, 2018.

Yongnam said: "Over the next few years, Singapore is expected to focus on major infrastructure projects such as the Cross Island Line, developments at Jurong Lake District and construction of Changi Airport Terminal 5, which will continue to support construction activity in Singapore. The group will continue to actively explore business opportunities in Singapore and selectively bid for targeted contracts in the region."

Yongnam’s net gearing rose to 0.77 times as at Sept 30, compared to 0.51 times as at Dec 31 last year, due to the adoption of a new lease accounting standard which brought off-balance sheet operating leases into Yongnam's balance sheet.

Third-quarter loss per share was 2.13 Singapore cents, narrowing from a loss per share of 2.64 Singapore cents in the third quarter least year.

Net asset value per share was 44.16 Singapore cents as at Sept 30, down from 48.57 Singapore cents as at Dec 31 last year.

Yongnam shares closed flat at S$0.15 before results were released after market close.