Financial Statements And Related Announcement - Second Quarter And/ Or Half Yearly Results
Group Income Statement
Statement of Comprehensive Income
Review of Performance
Group revenue decreased by 43% to $45.5 million for the quarter ended June 30, 2018 ("2QFY2018"), compared to $79.8 million in 2QFY2017, due to lower contributions from all segments.
On a segmental basis, revenue contribution from Structural Steelworks decreased 52.7%, from $49.3 million in 2QFY2017 to $23.3 million in 2QFY2018 due to the substantial completion of Senoko Food Hub and Jewel Changi Airport project at the end of FY2017. Outram Community Hospital was the key contributor to Structural Steelwork's revenue in the quarter under review.
Revenue from Specialist Civil Engineering projects decreased by 16.5% from $23.5 million in 2QFY2017 to $19.6 million in 2QFY2018 due mainly to a lower contribution from Hong Kong upon the completion of certain MTR projects. The contributions for the review quarter came from the Thomson-East Coast MRT and the Hong Kong MTR.
Revenue from Design and Build projects decreased by 72.8% from $6.7 million in 2QFY2017 to $1.8 million in 2QFY2018 mainly due to the substantial completion of a project for light industrial developments at Kallang Junction in Singapore at the end of FY2017.
The Group's gross loss increased from $0.5 million in 2QFY2017 to $3.3 million in 2QFY2018, which is due mainly to the drop in revenue as well as lower level of business activity during the quarter. Gross margin remained depressed by the continued low level of strutting and fabrication activities in Singapore and Hong Kong, resulting in overhead costs not being fully absorbed.
Other income increased by 237.7% from $53,000 to $179,000 mainly due to the receipt of a government grant.
General and administrative expenses increased from $3.3 million in 2QFY2017 to $4.8 million in 2QFY2018, mainly due to loss on disposal of fixed assets during the quarter. Finance costs increased from $1.2 million to $1.8 million, due to higher borrowings, bank charges and interests.
As a result, the Group reported a net loss of $8.2 million in 2QFY2018, compared to a loss of $4.1 million in 2QFY2017. Net asset value per share decreased from 55.91 Singapore cents as at 31 December 2017 to 53.64 Singapore cents as at 30 June 2018.
The Group's net gearing remained at a healthy level of 0.42 times as at 30 June 2018, compared to 0.30 times as at 31 December 2017.
On 23 May 2018, Yongnam, via its 30% owned joint venture with CIMIC Group Limited's Leighton Asia, secured a $553.8 million contract for the North-South Corridor project (N103) from Singapore's Land Transport Authority.
Separately, the Group secured four structural steelworks contracts in July 2018 for the fabrication and supply of structural steel kingposts for Singapore General Hospital, a mixed development project in Bidadari as well as the construction of an industrial development in Singapore, with a total value of $23.0 million.
The Group is also pursuing a number of upcoming mega public sector infrastructure projects in Singapore this year. These include various major contracts for the Circle Line 6, North-South Corridor and Changi T5 Land Preparation. The Group is currently in active pursuit of $1.4 billion worth of new infrastructure and commercial projects in Singapore, Hong Kong, Australia, Philippines, India and Vietnam. As at 30 June 2018, the Group's order book stood at $273 million.
The Group continues to invest time and resources in bidding for potential projects in Singapore and regionally. Most of the potential projects, if awarded, are expected to make an impact from 2019.
In the medium term, public sector demand in Singapore is expected to be supported by upcoming mega infrastructure projects, such as the Jurong Regional Line, Cross Island Line and various infrastructure developments for Changi Airport Terminal 5.