SINGAPORE (Jan 25): Union Steel has declared earnings of $0.48 million for 2Q17, which is more than four times of the $0.11 million posted a year ago.
The Mainboard-listed metal recycling company attributes this improvement to contributions from a number of acquisitions it made in recent months – namely land transport engineering services company Megafab, in which Union Steel acquired a 70% stake in May 2016, as well as Transvictory, a group of companies providing offshore & marine services and products.
(See also: Union Steel makes maiden foray into offshore and marine industry with Transvictory group acquisition)
Group revenue grew by 3% to $23.5 million in 2Q17 from $22.9 million in the preceding year as Transvictory’s maiden revenue contributions helped to offset lower contributions from Union Steel’s engineering and trading businesses, and the absence of revenue from ceased operations in Malaysia.
As Transvictory and Megafab’s businesses command higher profit margins, this has also resulted in the group’s gross profit increasing from a boost in margins.
While Union Steel expects the outlook for the steel industry to remain challenging, with continued soft demand in the next few quarters, the group says it will focus on moving up the supply chain and fully integrating its recent acquisitions.
“The latest acquisition of Megafab has equipped us with land transport engineering and crane lifting solutions, notes executive chairman and CEO Ang Yu Seng.
“Combined with the capabilities of our other subsidiaries, we are now positioned to explore new regional opportunities in the industrial and offshore & marine sectors.”
Shares of Union Steel closed flat at 38 cents.
