SINGAPORE (Aug 7): Boustead Projects reported 1Q20 earnings of $4.7 million, 53% lower compared to the $10 million in 1Q19, on absence of one-off gains from sale of 25 Changi North Rise in FY19.

Earnings for 1Q19 was also affected by lower margins from current projects and a lower quantum of cost savings from previously completed projects.

This was despite a 59% increase in revenue to $62.4 million from $39.2 million a year ago, driven by revenue increases from both the group’s Design-and-Build and Real Estate business segments.

Revenue from Design-and-Build segment increased by 71% y-o-y to $54.4 million, supported by the healthy order book backlog carried forward at the end of FY19.

Revenue from Real Estate Segment increased by 10% y-o-y to $8.0 million, mainly due to increased management fees from the Boustead Development Partnership.

Cost of sales saw a steeper increase than revenue, as it was up 89% y-o-y to $50.8 million, which brought 1Q20 gross profit to $11.6 million, 5% lower than $12.3 million last year.

Meanwhile, the group also recorded other losses of $24,000, compared to other gains of $6.1 million in the previous year, mainly due to the sale of 25 Changi North Rise.

Selling and distribution expenses were 27% lower y-o-y at $0.8 million, while administrative expenses were 23% lower y-o-y at $4.3 million.

Finance expenses on the other hand surged 138% y-o-y to $1.1 million, mainly due to the adoption of SFRS(I) 16 Leases, which resulted in interest incurred on lease liabilities amounting to $0.5 million.

During the quarter, the group recorded a share of loss of associated companies and joint venture of $0.7 million, compared to profit of $0.2 million last year, mainly due to depreciation and interest expenses incurred on [email protected] where leasing income is still in the process of stabilisation.

Thomas Chu, managing director of Boustead Projects, says, “As one of the leading companies in the implementation of transformative technologies in the industrial real estate sector, we continue to invest in leading technology and productivity solutions to augment our activities. We also continue to explore various opportunities to form new strategic platforms that can widen our competitive offerings and enable long-term quality and sustainable business growth. Backed by our strong order book backlog and healthy financial position, we have formed a stable position from which we can pursue opportunities in M&A and growth initiatives across the region.”

Shares in Boustead Projects closed at 96 cents on Wednesday.