Boustead Singapore posts 12% rise in 3Q earnings to $8.7 mil on higher revenue

SINGAPORE (Feb 13): Boustead Singapore saw its earnings grow 12% to $8.7 million for the 3Q19 ended December, from $7.8 million a year ago.

3Q19 revenue jumped 43% to $145.6 million, from $102.2 million a year ago.

This was led by a 70% increase in revenue to $81.3 million from its Real Estate Solutions division, under Boustead Projects.

Revenue from the group’s Energy-Related Engineering division climbed 21% to $30.8 million, in line with the gradual but slightly volatile improvement in the outlook of the global oil & gas industries.

Gross profit grew 11% to $43.0 million in 3Q19, as gross margin fell 8 percentage points to 30%.

Other income was 44% higher at $2.0 million, led by a 58% increase in interest income.

Boustead Singapore registered other gains of $1.0 million in 3Q19, compared to other losses of $1.3 million a year ago. This was largely due to currency exchange gains of $1.4 million during the quarter, compared to a currency exchange loss of $0.6 million reported a year ago.

Share of losses of associated companies and joint ventures increased to $2.1 million during the quarter, from $1.2 million a year ago.

This was largely driven by Boustead Projects eliminating construction and project management profits attributable to projects which Boustead Projects has entered into with an associated company and joint ventures.

As at end December, cash and cash equivalents stood at $231.0 million.

Earnings per share rose to 1.8 cents for 3Q19 from 1.5 cents a year ago, while net asset value per share grew to 66.6 cents from 63.5 cents a year ago.

The group’s current order book backlog stands at a record quarterly-ending level of $765 million.

“While we continue to see gradual improvement in the outlook of the respective industries that we operate in, the business environment remains challenging with global geo-political headwinds,” says Wong Fong Fui, chairman and group chief executive officer of Boustead.

“Behind the scenes, we continue to diligently evaluate good acquisition and investment opportunities that may arise and are also in the process of reviewing the best avenues of working capital deployment for our Healthcare Division’s various proposed programmes for strategic growth,” he adds.

The group says it expects to continue to deliver steady results in FY19, barring unforeseen circumstances and shifts in the global economic outlook.

Shares in Boustead closed half a cent lower at 79.5 cents on Wednesday.