SINGAPORE (May 30): King Wan Corporation, the provider of mechanical and engineering (M&E) services, reported 4Q18 earnings plunged to $0.28 million from $5.36 million in 4Q17, due to lower gross profits and share of profit from its investment in a Singapore residential development.
This brings FY18 losses to $1.55 million, compared to earnings of $0.59 million in FY17.
Revenue for the quarter was 42% lower at $17.3 million, compared to $30.1 million in the previous year, mainly due to lower volume of Mechanical and Electrical (M&E) contracts in progress.
Gross profit for 4Q18 stood at $0.70 million, 90% lower than $6.75 million last year.
Administrative expenses increased by 12% to $2.16 million.
Share of profit of associates declined by 104% to $0.03 million, from $3.11 million a year ago.
During the quarter, the group recorded profits of $0.09 million from other operating expenses, compared to a loss of $2.13 million in the previous year.
To date, the group has $175 million worth of M&E engineering contracts on hand.
On the outlook, the group expects the M&E business segment to remain challenging in the next 12 months with continuous pressures on contract values and stiff competition for new projects.
Based on order books secured, the M&E business will remain the core business for the group and is expected to contribute positively to the group’s results for the next 12 months.
Shares in King Wan closed at 13 cents on Wednesday.