CSC Holdings, the foundation and geotechnical engineering specialist, has reported an 4% increase in earnings to $4.4 million for the three months ended 30 September 2010 (2Q FY11), compared to $4.1 million achieved in the first quarter ended 30 June 2010 (1Q FY11).

Revenue of $78.4 million for 2Q was also 0.9% higher than revenue of $77.7 million in 1Q.

Competition in the industry in the last one year has resulted in lower margins for new projects secured. However, with the recovery of the construction sector, margins for the last quarter has held firm. The company managed to achieve a 20% sequential rise in gross profit, to $11.2 million in 2Q FY11 from $9.3 million in 1Q FY11. Gross profit margin also increased sequentially to 14% in 2Q FY11 from 12% in 1Q FY11.

Operating expenses (which comprises administrative, distribution and other operating expenses) in 2Q FY11 were sequentially higher at $6.7 million (1Q FY11: $5.2 million) in line with increased activities and higher distribution cost incurred for the sale of equipment on the group’s equipment trading business.

Total shareholder’s equity stood at $193.6 million as at 30 September 2010, a 2% increase over $189.8 million as at 31 March 2010. Net asset value per ordinary share was 15.8 cents at 30 September 2010, up from 15.5 cents at 31 March 2010.

The group ended the quarter with cash and cash equivalents of $34.2 million and a gearing ratio of 0.41.

CSC has proposed an interim cash dividend of 0.4 cents per ordinary share (1H FY10: 0.2 cents) for
the six months ended 30 September 2010. Total dividend payable amounts to $4.9 million and this translates to a dividend payout ratio of about 57%.

CSC says demand seems to be improving as a steady stream of construction projects are expected to start in 2011. On the public sector side, these include Stage 3 of the MRT Downtown Line and the continued construction of more public housing in line with HDB’s building programme, school construction and upgrading programme and various other infrastructure projects.

Along with the recovering economy, several major private sector projects such as the South Beach mixed commercial development, the Singapore Sports Hub and other private residential projects are expected to commence in 2011. The group says it will actively participate in submitting tenders for all these upcoming public and private sector projects.

As at 1 November 2010, the group’s order book stands at a healthy $210 million (3 August 2010: $180 million).