Soilbuild Q1 net shrinks 91% to S$0.4m

April 25, 2017

LEILA LAI


NET profits for Soilbuild Construction Group plunged 90.7 per cent from nearly S$4 million to S$0.4 million in the first quarter ended March 31, 2017, the construction company reported on Monday.

Revenue dropped 35 per cent from S$102.5 million a year ago to S$66.6 million.

Soilbuild attributed the fall to several projects contributing less revenue as they neared completion.

Projects secured in the new financial year have also not yet contributed any revenue, as they are currently in the preparation stages. As a result, gross profit margin shrank to 4 per cent from 7.1 per cent previously.

Net cash outflow for the quarter amounted to S$6.7 million, compared to S$7 million of net cash inflow in the comparative quarter. The cash outflow was chalked up to lower net profits and a decrease in payables in Q1 2017.

Soilbuild also invested S$3.5 million in the period under review, mostly in the construction of its integrated construction and precast hub at Airport Road. It invested S$1 million in the corresponding quarter of 2016.

Soilbuild's total assets fell by S$19.8 million to S$195.6 million, partly due to the S$15.5 million decrease in construction contracts which also affected revenue.

The decrease was partially offset by an increase of S$2.9 million in the form of property, plant and equipment for the Airport Road hub.

Deposits paid for precast machineries accounted for another S$3.1 million increase in current assets.

Earnings per share took a hit, registering 0.06 Singapore cent from 0.60 Singapore cent in the previous year.

Growth in the construction sector has contracted by 1.1 per cent on a year-on-year basis during the quarter under review, according to advance estimates released by the Ministry of Trade and Industry on April 13.

The group said that while the slowdown in private sector construction activities has intensified competition in tenders for local construction projects, it will focus on cost efficiency and productivity in executing newly secured projects and tendering for new projects.

The group's order book stands at S$493.6 million as of March 31, 2017.

Shares ended trading at 0.23 Singapore cent before results were out on Monday, up 0.005 per cent.