Boustead Projects' net profit for the six months ended Sep 30 rose to S$7.7 million from S$5.9 million in the year-ago period. PHOTO: PIXABAY

 

MAINBOARD-LISTED Boustead Projects reported on Thursday (Nov 10) a 30 per cent increase in net profit for its first half, mainly due to higher interest income and a higher share of profit of associates and joint ventures.

 

Net profit for the six months ended Sep 30 rose to S$7.7 million from S$5.9 million in the year-ago period. On a per-share basis, earnings rose to S$0.024 from S$0.019 in H1 FY2022.

 

The group&rsquo s overall revenue fell 34 per cent on year to S$117.7 million, mainly due to lower revenue contributions from the engineering & construction business, in line with a leaner order backlog of projects carried forward at the end of FY2022. 

 

This was partially offset by higher revenue contributions from the group&rsquo s real estate business, owing to higher rental income from growing real estate activities in Vietnam, Boustead said in a bourse filing.

 

Wong Yu Wei, executive deputy chairman of Boustead Projects, said: &ldquo Overall, we delivered a respectable performance for H1 FY2023, amid the challenging and complex operating environment, where global inflation and tighter local conditions for manpower, materials and supply chain pose potential adverse risks.&rdquo

 

He added that the progressive clearing of projects secured pre-pandemic will free up resources that will enable the group to take on new projects in high value-added sectors.

 

Boustead&rsquo s current order backlog stands at S$452 million, having secured S$320 million in new contracts since the start of FY2023.

 

Net asset value per share as at Sep 30 stood at S$1.265, up from S$1.234 a year earlier. No dividend was declared, unchanged from a year earlier as it is not the company&rsquo s practice to declare an interim dividend.

BOUSTEAD Projects : AVM -0.54% has acquired an 18-storey freehold luxury mixed-used development along 28 and 30 Bideford Road through its 50 per cent-owned joint venture of the group&rsquo s wholly-owned subsidiary, BP-Real Estate Investment.

 

While the property was independently valued by Savills at S$550 million as at Jun 20, it was acquired for a consideration of S$515 million excluding goods and services tax.

 

Boustead Projects intends to satisfy its subsidiary&rsquo s portion of the consideration by way of cash funded from the group&rsquo s internal resources.

 

The sale of 28 and 30 Bideford Road comes after a share charge was enforced from September 2021 in relation to S$110 million in notes due 2020. The notes were acquired by a Boustead Projects-led consortium in August 2021, and were secured by a charge over the shares of the property&rsquo s owner SC Aetas Holdings.

 

SC Aetas was subsequently placed under creditors&rsquo voluntary liquidation, and the property&rsquo s sale was initiated as part of the winding-up process.

 

Based on audited financial statements of SC Aetas as at end-2020, the property had a carrying value of S$605.4 million. The Business Times in December 2021 also reported that the property had been put up for sale at a S$600 million indicative price.

 

In its latest Friday (Jun 24) filing, Boustead Projects said it believes the acquisition will benefit the group&rsquo s real estate business, enable the company to expand and diversify its property portfolio, as well as increase its income streams.

 

The group expects the latest acquisition to have a material effect on its earnings per share for the current FY2023 ending Mar 31, 2023. This is not anticipated to materially affect the group&rsquo s net tangible assets per share over the same period.

 

Spanning a land area of about 2,006.9 square metres and a gross floor area of 14,637.9 square metres, the development at 28 and 30 Bideford Road obtained its Temporary Occupation Permit on Jan 10, 2020.

 

The development comprises targeted hospitality, healthcare and commercial components. It was designed by Japanese architectural firm Nikken Sekkei and is earmarked to attain BCA (Building and Construction Authority) Green Mark Platinum certification.

 

REAL-estate solutions provider Boustead Projects : AVM +0.54% reported a 91 per cent fall in earnings to S$11.3 million for FY 2022 ending Mar 31, down from S$131.7 million the year before, as a result of the absence of a one-off gain.

 

The board of directors, upon the release of the company&rsquo s earnings results after market close on Wednesday (May 29), are proposing a final dividend of S$0.002 cents per share and a special dividend of S$0.008 cents per share, subject to shareholders&rsquo approval.

 

At the end of FY2021, the company had sold its interest in 14 properties to Boustead Industrial Fund (BIF), netting a one-off gain of S$134.8 million. The absence of this one-off gain would have resulted in a loss of S$3.2 million for FY2021.

 

Thomas Chu, managing director of Boustead Projects, said: &ldquo Having worked through several large projects secured pre-pandemic with little margin for error, we are expecting to exit from the pre-pandemic backlog and be poised for a gradual recovery.&rdquo

 

Revenue grew 13 per cent year on year to S$339.1 million from S$301.4 million on higher recognition on engineering and construction (E& C) projects in H1 FY2022 ending Sept 30. Total other income for FY2022 was 115 per cent higher at S$7.2 million from S$3.5 million, due to interest income derived from notes issued by BIF.

 

Wong Yu wei, executive deputy chairman of Boustead Projects, said: &ldquo We are increasingly building up our recurring income streams with successful execution of asset ownership, asset management and fund management, and look forward to our various real-estate platforms delivering growth, improving resilience and transforming our business to be less reliant on traditional E& C activities.&rdquo

 

Boustead Projects&rsquo FY2022 earnings per share fell to S$0.0036 from S$0.423 due to the absence of the one-off gain. Net asset value per share fell 8 per cent to S$1.253 from S$1.369.

 

The company&rsquo s order backlog stood at about S$253 million as of Mar 31, 2022, but Boustead Projects warns of margins for future E& C projects being under pressure. Rising labour costs, construction material and supply chain costs stemming from the economic and political environment, inflation and lingering effects of the pandemic continue to weigh on margins.

 

Wong said: &ldquo In view of the progress of the E& C Business, Real Estate Business and addition of full-fledged fund management activities, we expect to remain profitable for FY2023, barring unforeseen circumstances and further disruptions caused by the pandemic. We have built a stable foundation that offers multi-faceted resilience in Singapore and the region, and are well positioned to actively pursue multiple opportunities in the future.&rdquo

Atiqah Mokhtar  Published on Thu, Jun 03, 2021

To that end, his &lsquo add&rsquo rating and ex-dividend target price of $1.40

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