Ryobi Kiso Holdings, the ground engineering specialist and provider of bored piling and geoservices, today reported a 70.1% y-o-y fall in net profit to $3 million for the second quarter ended 31 December 2010 (2Q11).

Revenue posted was $31.5 million in 2Q11, an increase by $5 million or 18.5% from $26.5 million in 2Q10 largely due to an increase in value of work done for on-going and completed projects; and new piling projects secured. These major private and public sector projects include The Scala, Flamingo Valley, Edusports and HDB Bukit Panjang N4 C14.

But cost of sales increased by $10.5 million or 80.3% to $23.6 million in 2Q11 from $13.1 million in 2Q10 because of higher material and subcontractor costs, diesel and transportation costs and depreciation of machinery and equipment.

As a result, the group reported a $5.6 million or 41.4% decrease in gross profit to $7.9 million in 2Q11 from $13.5 million in 2Q10.

Correspondingly, gross profit margin declined from 50.7% in 2Q10 to 25.1% in 2Q11. If the above write-back of allowance for liquidated damages was not made, gross profit would be $7.5 million in 2Q11 as compared to $8.8 million in 2Q10.

Ryobi Kiso says it expects to remain profitable for the financial year ending 30 June 2011.