SINGAPORE (Aug 8): Real estate group Boustead Projects announced a 5% fall in 1Q18 earnings to $5.8 million from $6.1 million a year ago on lower revenue.
Revenue for the quarter came in at $45.7 million, down 25% from $60.9 million a year ago on the back of lower revenue contributions from both the group’s design-and-build and leasing business segments.
Design-and-build revenue for 1Q was 28% lower on-year at $37.8 million compared to $52.4 million in 1Q17, as the previous year’s comparative period registered more projects with greater work progress. In addition, there was lower total value of contracts secured during FY17 for revenue conversion during 1Q18.
Meanwhile, leasing revenue fell 7% to $7.9 million from $8.5 million a year ago on the lack of contribution from 36 Tuas Road, due to AusGroup’s early lease termination in the previous quarter.
The overall revenue decline was however cushioned by better overall gross margins which were achieved due to productivity improvements and unlocking of cost savings from projects.
This led a 7% increase in overall gross profit to $14.5 million as well as a higher overall gross margin of 32% for the quarter compared to 22% in 1Q17.
As at end June, the group’s cash and cash equivalents stood at $135.4 million with total equity of $235.4 million.
Thomas Chu, managing director of Boustead Projects, says he expects FY18 to be another challenging year for the group.
“Nonetheless, with our healthy balance sheet and strong net cash position, we are in a strong position to pursue our strategies on strengthening our smart building and eco-sustainable capabilities, driving cost and productivity improvements, focusing on higher value industries, and building additional strategic partnerships and platforms regionally,” says Chu.
Shares in Boustead closed flat at 95 cents on Tuesday.