Mainboard-listed BRC Asia, one of the largest prefabricated steel reinforcement providers in Singapore, says net profit for first quarter ended 31 December 2010 (1Q2011) fell 52% y-o-y to $3.3 million due to rising steel costs and intense market competition which halved gross profit margin to 9.2% in 1Q2011 from 18.8% in 1Q2010. Revenue for first quarter ended 15% higher y-o-y to $72.4 million due to higher sales volume amidst buoyant construction activities in Singapore.

BRC Asia says while it may be able to sell more reinforcing steel in 2Q, continued steel price volatility and a very competitve market environment will put its margins under strong pressure.

“In order to remain at the forefront of this industry, we must be prudent in inventory procurement and management while at the same time push ahead with our efforts to improve our productivity and value engineering so as to fortify our position as a ‘Total Reinforcing Solutions’ provider,” says Managing Director Lim Siak Meng.