Full Year Results Financial Statement And Related Announcement
Group Income Statement
Statement of Comprehensive Income
Review of Performance
Group revenue decreased by 4.6% to $306.7 million for the year ended December 31, 2017 ("FY2017"), compared to $321.4 million in FY2016, due mainly to lower contributions from the Group's Structural Steelworks and Mechanical Engineering businesses.
On a segmental basis, revenue contribution from Structural Steelworks decreased 9.0%, from $215.6 million in FY2016 to $196.2 million in FY2017 mainly due to substantial completion of Marina One, Jewel Changi Airport and Senoko Food Hub projects. SGH Community Hospital and the remaining works in Senoko Food Hub and Jewel Changi Airport were the key contributors to Structural Steelwork's revenue in the quarter ended December 31, 2017 ("4QFY2017") under review.
Mechanical Engineering revenue decreased from $32.1 million in FY2016 to $1.7 million in FY2017, due to the completion of the fabrication of Heat Recovery Steam Generator ("HRSG") non-pressure parts for two power plants in Qatar and Egypt.
Revenue from Specialist Civil Engineering projects increased by 34.4%, from $66.2 million in FY2016 to $89.0 million in FY2017 due to higher contribution from Thomson-East Coast MRT projects and HK MTR projects.
On a geographical basis, Singapore continued to be the core contributor, accounting for 88.1% of total revenue, compared to 90.1% in FY2016. The other contributors were Hong Kong and Myanmar.
Notwithstanding a 4.6% drop in the revenue in FY2017, the Group's gross loss narrowed to $3.6 million, as compared to a gross loss of $13.8 million in FY2016. This was due to improved project margins for some on-going projects. Nonetheless, the Group remained impacted by the continued low level of strutting and other activities in Singapore and Hong Kong, resulting in overhead costs not being fully absorbed. A provision was also made in anticipation of lower negotiated variation orders for Senoko Food Hub project. Together, these factors depressed the Group's gross margin for the year.
On the cost front, general and administrative expenses decreased by 19% from $19.4 million in FY2016 to $15.7 million in FY2017, mainly due to lower staff costs, professional fees, other general and administrative expense as well as the absence of allowance for doubtful debt in FY2017. Finance costs decreased by 20.9% from $5.6 million to $4.5 million, due to lower borrowings.
As a result, the Group's net loss narrowed from $32.8 million in FY2016 to $20.2 million in FY2017. Net loss attributable to owners of the Company was also reduced by 50.1% from $31.6 million in FY2016 to $15.8 million in FY2017.
Net asset value per share decreased to 55.91 Singapore cents as at 31 December 2017 compared to 63.05 Singapore cents as at 31 December 2016 arising mainly from the share placement exercise completed on 17 October 2017.
The Group's net gearing remained at a healthy level of 0.3 times as at 31 December 2017, compared to 0.33 times as at 31 December 2016.
The group had bidded for upcoming mega public sector infrastructure projects in Singapore this year which includes various major contracts for the Circle Line 6 and North-South Corridor. The Group is also bidding for various infrastructure projects in Hong Kong and Australia. Public sector demand in Singapore is expected to be supported by upcoming mega infrastructure projects in the medium term, such as the Jurong Regional Line, Cross Island Line, the Kuala Lumpur – Singapore High Speed Rail and various infrastructure developments for Changi Airport Terminal 5.
The Group is currently in active pursuit of $1.2 billion worth of new infrastructure and commercial projects in Singapore, Hong Kong, Australia, Malaysia and the Middle East. As at 31 December 2017, the Group's order book stood at $152 million.
Separately, the Group secured three Specialised Civil Engineering contracts in February 2018 for the Thomson-East Coast Line and Circle Line 6 as well as one Structural Steelworks contracts for a development at Health City Novena, with a total value of S$22.9 million. These contracts are expected to have a positive impact on the Group's financial performance for the year ending 31 December 2018.