CSE Global H1 profit falls 33.3% amid volatile energy prices, US winter
LOWER revenues and lower favourable exchange differences led to CSE Global's net profit tumbling 33.3 per cent to S$10.1 million for the first half of this year, from S$15.1 million in H1 2020.
Revenue declined by 8.3 per cent to S$234.5 million, from S$255.6 million in the year-ago period. This was partly due to project delays and lower time and material revenues in the Americas region affected by the Covid-19 pandemic, said CSE.
The company, which provides infrastructure-engineering services and telecommunications solutions and manufactures process-control and automation equipment, added that the severe winter in the US during the first quarter as well as volatile energy prices had also weighed on revenue.
The Americas contributed 58.6 per cent of revenue in the first half, while the Asia-Pacific region on the one hand, and Europe, the Middle East and Africa (EMEA) on the other, contributed 38.9 per cent and 2.5 per cent respectively.
While revenue from the Americas declined 20.2 per cent during the six months, the Asia-Pacific region recorded a 11.9 per cent growth from higher recognition of revenue from infrastructure projects in Australia. EMEA revenue tripled on the back of contributions from new acquisitions in the UK.
Earnings per share stood at 1.97 Singapore cents for the six months ended June 2021, down from 2.96 cents in the corresponding period last year.
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CSE's board recommended an interim cash dividend of 1.25 cents per share, unchanged from the year-ago period. It will be paid on Sept 2, after the books are closed on Aug 19.
Group managing director Lim Boon Kheng said CSE secured a healthy pipeline of projects in excess of S$200 million in the first half of the year. "In particular, we see opportunities in the infrastructure sector, with the need for more public infrastructure projects alongside growing digitalisation, automation, physical and cybersecurity requirements," he said.
The group's order intake in H1 2021 fell by 13 per cent year on year to S$210.6 million, as a result of lower orders in the energy sector due to delays in project awards and the slower-than-expected recovery in demand for industrial automation systems and services.
On the other hand, new orders for the infrastructure sector rose 25.1 per cent to S$79.7 million, with higher orders of radio communication and solutions due to a stronger pipeline of projects across Australia, the UK and the US.
Shares of mainboard-listed CSE rose 3.9 per cent or S$0.02 to close at S$0.54 on Wednesday, before it announced its results.
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