Mainboard-listed BRC Asia, the provider of steel reinforcement solutions, has reported earnings of $9.6 million for the 1QFY2021 ended December, 24% lower than earnings of $12.7 million a year ago.

The lower earnings were attributable to provisions totalling $13.2 million. The previsions were for onerous contracts, impairment loss and fair value changes on trade receivables, as well as fair value changes on derivatives.

Revenue fell 6% y-o-y to $213.4 million due to lower sales volume due to the measures brought about by Covid-19.

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Gross profit margin fell 2.1 percentage points y-o-y to 11.0% mainly due to the provision of onerous contracts.

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A provision for those contracts stood at $7.9 million this quarter compared to the reversal of $6.3 million in 1QFY2020.

Accordingly, 1QFY2021 profit fell 21% y-o-y to $23.4 million due to lower sales volumes and the provision for onerous contracts.

Impairment loss on trade receivables increased 238% y-o-y to $2.5 million in 1QFY2021 from $0.7 million in 1QFY2020, mainly due an increase in trade receivables at amortised cost.

The group’s share of profit from its joint venture increased 44% y-o-y to $0.4 million due to better local market conditions.

Share of losses of associates for the quarter was up 20% y-o-y to $1.5 million attributable to BRC Asia’s 17% equity interest in Pristine Islands, an investment holding company that has a 100% interest in a subsidiary that operates and manages an airport, hotel and resort in the Maldives.

The losses were partly due to the drop in hotel and occupancy rates in the Maldives.

SEE: BRC Asia seeks to raise $14.2 mil in proposed placement of 10 mil new shares

1QFY2021 earnings per share (EPS) stood at 4.12 cents on a fully diluted basis compared to 5.45 cents a share in the year before.

As at Dec 31, 2020, cash and cash equivalents stood at $48.5 million.

"In line with Phase 3 of Singapore's reopening and a national effort to vaccinate the Singapore population, we remain cautiously optimistic towards the recovery of general economic activity and are confident that BRC will navigate through this trying time,” says BRC Asia’s CEO Seah Kiin Peng.

Shares in BRC Asia closed 3 cents higher or 1.9% up at $1.61 on Feb 3.