Sanli Environmental revenue rises 22.7% to S$130.6m

Local environmental engineering company Sanli Environmental’s financial year (FY) 2024 recorded a 22.7% increase in revenue to $130.6m from $106.4m in FY2023, attributing to its growth in both its Engineering, Procurement and Construction (EPC) as well as operations and maintenance (O&M) segments.

According to CEO Sim Hock Heng, there was strong revenue growth in FY2024, but its overall performance was muted by the challenging operating environment.

Sanli’s EPC revenue grew by 22.7% to $108.1m due to the execution of new projects initiated in 2023, while the O&M segment grew by 22.5% to $22.4m, driven by the completion of more orders in FY2024. The group’s gross profit increased by 14% to $16.2m in FY2024.

However, the group’s FY2024 profit after tax was $3m, a decrease of 29.3% from $4.2 million in FY2023. Heightened supply chain costs, elevated interest rates, inflationary pressures, and global economic uncertainties contributed to this decline.

Its overall gross profit margin decreased from 13.4% to 12.4% in FY2024, due to the performance of the O&M segment which faced higher material costs arising from market fluctuations and supply chain challenges that resulted in a lower profit margin as compared to the EPC segment.

“We have made good progress with our diversification strategy to broaden our revenue streams and capitalise on emergent opportunities,” Sim said. “We will continue to build up our project pipeline, while bolstering it with new recurring income streams that are being developed.”

Sanli’s diversification strategy includes expanding into manufacturing sector, industrial sector, and renewable energy sector abroad. In FY2023, Sanli established a manufacturing arm, Mag Chemical, to produce magnesium hydroxide slurry, with targeted applications in the environmental protection market. This initiative aims to diversify its revenue streams and capitalise on green technologies that can tap on its existing engineering expertise.

Its wholly owned subsidiary, Enviro Plant and Engineering (EPE), secured its first project and is progressing according to schedule. EPE specialises in providing environmental engineering solutions, including water and wastewater treatment, to industrial plants in Singapore and South East Asia.

Furthermore, the group is looking at Singapore’s $100bn coastal protection plan and other water infrastructure projects. However, ongoing global geopolitical tensions continue to pose economic challenges, and this will likely have an impact on the group’s operations.

The group continues to pursue major municipal projects in Singapore and has an order book of $315.6m, which is expected to be completed by 2027.   

Update on Sanli Myanmar

Sanli Myanmar is a 60%-owned subsidiary of the group that provides engineering, construction and water-related services in Myanmar.

Despite a stabilised operating environment following the easing of domestic and international travel restrictions in the country, the political situation in Myanmar remains a hindrance to Sanli Myanmar’s growth trajectory. In FY2024, Sanli Myanmar contributed about 2.2% of the group’s revenue. 

Its CEO said, “With ongoing geopolitical tensions and uncertain global economic outlook, we will continue to remain vigilant in terms of managing our costs and cash flow while mitigating business risks as we pursue opportunities that leverage our strong engineering expertise and track record.”

(Image: Sanli)