SINGAPORE (Aug 6): OKP Holdings saw its earnings plunge 97.8% to $0.1 million for the 2Q18 ended June, from $5.0 million a year ago.

2Q18 group revenue fell 20.6% to $27.4 million, from $34.5 million a year ago.

The decline was led by a 61.2% drop in construction revenue to $8.7 million in 2Q18, from $22.5 million a year ago. The segment, which a year ago accounted for 65.3% of total revenue, in the current quarter only made up 31.9% of total revenue.

The decrease in revenue from the construction segment was largely attributable to a lower percentage of revenue recognised from a few construction projects which were reaching completion.

In addition, OKP also saw no revenue generated from a construction project at the Pan-Island Expressway exit to Tampines Expressway in 2Q18. OKP says the contract for the construction of the viaduct has been terminated by mutual agreement. This comes after a work site collapse at the uncompleted viaduct in July last year, which left one worker dead and 10 others injured.

See: OKP group MD, employees to face charges over PIE viaduct collapse

The lower revenue was partially mitigated by a 46.3% increase in maintenance revenue to $17.4 million due mainly to some of the projects progressing to a more active phase in 2Q18, as well as a surge in rental income to $1.2 million during the quarter, from $47,000 a year ago, due mainly to rental income from a newly purchased property in Western Australia.

Gross profit margin was slashed by 16.8 percentage points to 6.6% in 2Q18, largely attributable to additional cost arising from the mutual termination of the viaduct project.

Earnings per share (EPS) fell 98.1% to 0.03 cent in 2Q18, from 1.61 cents a year ago.

As at end June, cash and cash equivalents stood at $61.9 million.

OKP’s net order book amounted to $208.3 million as at June 30, 2018 with projects extending till 2021.

“On the construction front, the operating environment is expected to remain challenging in spite of the improving sector prospects in the near-to-medium term,” says Or Toh Wat, OKP’s group managing director.

“We will continue to seek suitable opportunities to enlarge our foothold in property, both locally and abroad, through strategic partnerships,” Or says, adding that the group will remain focused on its core civil engineering business.

Shares in OKP closed 1 cent higher at 26 cents on Monday.