Forex losses, oil and gas slump hit Boustead's profit

Foreign exchange losses and the continued global oil and gas recession dampened Boustead Singapore's performance in FY2018, with net profit falling 24 per cent to $25.39 million and revenue dipping 5 per cent to $414.1 million.

Energy-related engineering revenue was weighed down by delays in major expenditures by clients, and fell 2 per cent to $94.9 million.

Meanwhile, real estate solutions revenue decreased 12 per cent to $201.3 million amid headwinds in the industrial real estate sector.

The mainboard-listed infrastructure engineering firm attributed the overall decline mainly to currency exchange losses of $5 million, and the absence of other gains totalling $17 million in FY2017.

But Boustead said revenue rose 8 per cent to $116.6 million for the geospatial technology business on steady demand across exclusive markets in Australia and South-east Asia, marking a new division record.

For the fourth quarter ended March 31, net profit was down 18 per cent year-on-year at $7.5 million, again largely due to an absence of other gains that were present in the fourth quarter of 2017.

Revenue rose by 28 per cent over the same period to $116.72 million, while earnings per share fell to 1.5 cents.

  • AT A GLANCE

  • REVENUE: $116.7 million (+28%)

    NET PROFIT: $7.5 million (-18%)

    FINAL DIVIDEND PER SHARE: 2 cents (+33%)

Boustead's order book stands at about $307 million, comprising unrecognised project revenue remaining at the end of the financial year and new orders secured since then. In FY2018, it secured $313 million in contracts, compared with $180 million in the previous year.

The board is proposing a final ordinary dividend of two cents per share in addition to the interim ordinary dividend of one cent per share. The total ordinary dividend for FY2018 will be three cents per share, to be paid on Aug 17, a 50 per cent increase from FY2017.

"We achieved healthy core profit growth in FY2018 despite lower revenue, gross margin pressure and the persistence of headwinds across two of our three divisions," chairman and group chief executive Wong Fong Fui said in a statement.

Boustead shares yesterday closed 0.64 per cent up at 78.5 cents before the results were announced.

A version of this article appeared in the print edition of The Straits Times on May 24, 2018, with the headline 'Forex losses, oil and gas slump hit Boustead's profit'. Print Edition | Subscribe