Koh Brothers Eco Engineering Limited, a SGX Catalist-listed sustainable engineering solutions provider, together with its subsidiaries, reported revenue of S$52.8 million for the three months ended 31 March 2018 against S$70.6 million in Q1 2017, the previous corresponding quarter.
The Group’s lower revenue was mainly due to a decline in revenue contribution from the Engineering and Construction division following the completion of certain projects at the end of 2017. In line with the lower revenue, the Group recorded net profit attributable to shareholders of S$0.4 million as compared to S$1.4 million in Q1 2017.
“As at the end of March 2018, the Group’s construction order book stood at a high of S$915.9 million. Over the past eight months, we have secured three major projects – the Woodlands Health Campus (S$192 million), Deep Tunnel Sewerage System Phase 2 (S$182 million) and Circle Line 6 (S$225.4 million). Our share of these contracts amounted to a total of S$599.4 million, thus reflecting our commitment and competitive edge to capture opportunities amid a challenging operating environment,” Koh Brothers Eco Chairman, Francis Koh, said. “Moving forward, as we deliver the projects under our construction order book progressively, we will remain vigilant in managing costs and yet adhering to safety practices and standards.”
In Q1 2018, the Group’s earnings per share came to 0.03 cents compared to the 0.16 cents seen in Q1 2017. Net asset value per share increased from 5.94 cents as of 31 December 2017 to 6.02 cents as of 31 March 2018.
The Group’s balance sheet remains robust with cash and bank balances of S$19.1 million and a low net gearing of 0.23 time as of 31 March 2018.
Outlook and future strategies
“In view of the improving outlook in the construction industry, driven by the public sector, we will continue to capitalise on our recently acquired construction and civil engineering capabilities together with our water treatment competencies to seize opportunities to boost out order book further,” Paul Shin, CEO of Koh Brothers Eco, added.
In January 2018, the Building and Construction Authority projected construction demand to reach between S$26 billion and S$31 billion in 2018, with 60 per cent of the projects to be derived from the public sector. The pipeline of projects include additional major contracts for infrastructure projects like the North-South Corridor, new MRT works, and DTSS Phase 2 as well as the remaining package for Runway 3 three the Changi Airport Group.
Based on advanced estimates announced by the Ministry of Trade and Industry on the 13th of April 2018, the construction sector contracted by 4.4 per cent on a year-on-year basis in Q1 2018, extending the five per cent decline in the previous quarter. The sector’s weak performance was due to lower construction activity level in both the private and public sectors. However, on a quarter-on-quarter seasonally-adjusted annualised basis, the construction sector grew by 4.1 per cent, a reversal from the 0.2 per cent decline in the preceding quarter.