GKE Corporation has reported earnings of $6.5 million for the 1HFY2021 ended November, almost three times the earnings of $1.8 million a year ago.

The significant increase in net profit was mainly attributable to the optimal occupancy of GKE Corp’s warehouses at higher rental rates in Singapore, as well as higher volume of ready-mixed concrete (RMC) that was produced and sold at higher selling prices in Wuzhou, China.

Payouts from government support schemes also contributed to the higher earnings, says GKE Corp.

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Revenue rose 9.2% y-o-y to $60.1 million, mainly driven by contributions from GKE Corp’s RMC manufacturing facility in China and higher storage revenue in Singapore.

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Gross profit improved by 41.9% y-o-y to $14.5 million in tandem with higher margins from the RMC manufacturing facility and higher warehouse occupancy.

Correspondingly, gross profit margin rose to 24.2% in 1HFY2021 from 18.6%.

Other income grew 127.6% y-o-y to $3.2 million mainly due to government support schemes.

Operating expenses grew marginally by 1.6% y-o-y to $6.7 million, due to higher marketing and distribution expenses for Wuzhou Xing Jian and a slight increase in staff and depreciation expenses.

Finance costs increased by 10.1% y-o-y to $1.5 million due to an increase in interest expenses on finance lease liabilities from the purchase of concrete mixer trucks at Wuzhou Xing Jian and Cenxi Xing Jian.

Share of loss from associates increased to $73,000 in 1HFY2021 from $1,000 due to the start-up costs of the 24%-owned construction waste materials recycling plant, Cenxi Haoyi Recycling.

GKE Corp’s net asset value rose to $84.0 million from $76.8 million the year before.

Net asset value per share for 1HFY2021 rose to 10.84 cents as at Nov 30, 2020, from 9.82 cents a year ago.

SEE: GKE Corporation reports earnings of $2.9 mil in 2H20; turnaround from losses

Earnings per share (EPS) rose to 0.84 cents per share on a fully diluted basis compared to 0.24 cents per share a year ago.

No dividend has been declared for the period as the group has decided to conserve cash amid the current challenging business environment.

“The coronavirus outbreak brought unprecedented challenges as well as opportunities. The disruptions to supply chains arising from the pandemic and political uncertainties gave the Group opportunities to diversify our customer base, particularly in the healthcare and medical supplies sector,” says GKE Corp’s CEO and executive director Neo Cheow Hui.

“The Group’s strategic investments in infrastructural materials and services in China continues to register strong earnings growth on the back of China’s economic recovery. Our RMC manufacturing facility in Wuzhou City has completed the installation of a third production line, bringing our aggregate production capacity from 800,000m3 per annum to 1,200,000m3 per annum at end December 2020. The additional line was added to cope with the increasing demand for RMC required for the infrastructural and property development projects in Wuzhou City,” adds Neo.

“We are appreciative of the patience and support from our stakeholders – employees, suppliers, customers, and shareholders over the years, and we are confident that our focus on warehousing and logistics in Singapore and infrastructural materials and services in China, will see us emerge stronger post-pandemic.”

Shares in GKE Corp closed 0.4 cent lower or 2.9% down at 13.5 cents on Jan 13.