Tee International posts 35% drop in 2Q net profit on higher costs

Higher costs dragged down second-quarter net profit for Singapore mainboard-listed Tee International, an engineering and property group.

Its earnings for the three months to Nov 30 last year dropped 35 per cent over a year ago to $1.6 million, despite a 13.9 per cent rise in revenue to $50.1 million.

The higher turnover was offset by an 18.2 per cent increase in the cost of sales to $45.8 million, and a 71.9 per cent jump in administrative expenses to $4.2 million.

Cost of sales went up because of higher costs incurred from ongoing overseas engineering projects.

Administrative expenses spiked mainly due to the acquisition of Interlift Sales and increased hiring in line with the group's expansion in its infrastructure and property development businesses.

Other operating expenses increased from $30,000 in the second quarter of the company's last financial year to $126,000 in the same period this year. This was on the back of unrealised foreign exchange losses, which resulted from the depreciation of the Malaysian ringgit against the Singapore dollar.

Earnings per share for the second quarter was 0.34 cents, from 0.63 cents in the same period the previous year.

Net asset value per share for the group inched up to 22.9 cents as at Nov 30 last year, from 20 cents as at May 31 last year.

The outlook for the group's business is uncertain and Tee International "remains cautious", it said in its statement on Friday. However, the group "continues to see growth opportunities in Singapore and the region" and will take advantage of these opportunities when it sees fit.

The group has declared an interim dividend, the amount of which will be announced at a later date.