Yongnam Holdings falls into the red

SINGAPORE - Construction group Yongnam Holdings fell into the red, with a first quarter net loss of $1.9 million, reversing from profit of $11.5 million previously.

Revenue for the three months to March 31 eased by 12.4 per cent to $71.8 million, with the completion of the mega Marina Coastal Expressway projects at the end of last year.

Revenue contribution from the specialist civil engineering division fell by 22.1 per cent to $28.5 million. This came from on-going projects, including the MRT Downtown Line 2, Downtown Line 3 and the Hong Kong MTR.

Revenue from structural steelwork projects eased by 4.5 per cent to $43.3 million.

The Singapore Sports Hub, South Beach Development, National Art Gallery, Market Street and Marina One were the key contributors to structural steelworks revenue during the quarter.

Lower-margin projects, coupled with higher fixed production and project overheads as a result of lower fabrication and erection activities, resulted in gross profit margin falling to 4.1 per cent, compared to 23.8 per cent in the same period last year.

Loss per share amounted to 0.15 cent, against profit of 0.91 cent previously while net asset value per share slipped to 24.79 cents compared to 24.98 cents as at Dec 31.

Looking ahead, Yongnam expects the year to be difficult as its performance continues to be dependent on the rate and extent of success in securing new contracts, most of which would start contributing only from the second half year.

However, outlook for infrastructural developments and commercial projects in Singapore and the region remains positive, it noted.

In the first quarter, the group secured orders amounting to $54.3 million, including two new structural steelworks subcontracts for the upcoming Changi International Airport Terminal 4 and the redevelopment of the UIC Building along Shenton Way.