PEC Limited reports FY2024 earnings of $16.0 mil, up 136% y-o-y.

Plant and terminal engineering specialist, PEC IX2 0.00% Limited, has reported earnings of $16.0 million in FY2024 ended June 30, up 136% y-o-y from $6.8 million in the previous financial year. 

 

The group&rsquo s 2HFY2024 earnings similarly saw an increase of 176% y-o-y to $10.79 million in FY2024. 

 

Earnings per share stood at 6.3 cents in FY2024, up from a share of 2.7 cents in FY2023. 

 

The increase in earnings came on the back of the group&rsquo s rising revenue which saw an increase of 14% y-o-y to $491.0 million in FY2024. This was driven by an increase in project and maintenance works from overseas.

 

Gross profit was also up by 33% at $115.0 million in FY2024, compared to $86.3 million in the same period last year, due to project settlements within the full-year period. 

 

Similarly, the group&rsquo s gross profit margin also increased to 23% in FY2024, on the back of contributions from project works. 

 

For the FY2024, PEC&rsquo s cash generated from operating activities stood at $42.7 million. 

 

The group used $10.2 million in investing activities in FY2024, driven by investments in a fabrication facility, purchase of construction equipment, motor vehicles and office equipment to support the business operation. The amount was partially offset by proceeds from disposal of assets and quoted investments.

 

Additionally, the group used $12.1 million in financing activities FY2024, due to the net repayment of borrowings, dividend payment to shareholders, purchase of treasury shares and payment of lease liabilities.

 

Overall, the group saw an increase in cash and cash equivalents of $20.4 million to S$146.6 million in FY2024.

 

As such, the group has proposed to declare a dividend of 2.0 cents per ordinary share in the current financial year. 

 

Pec Limited, the provider of mechanical engineering and contracting services, reported earnings of $6.9 million for the 1HFY2024 ended Dec 31, 2023, 96% higher y-o-y.

 

Earnings per share (EPS) stood at 2.0 cents on a basic and diluted basis.

 

Revenue grew by 50% y-o-y to $287.0 million due to a higher number of projects and maintenance works across the group&rsquo s geographical segments.

 

Gross profit grew by a smaller 27% y-o-y to $56.4 million on higher cost of sales and lower gross profit margin (GPM) of 20%, 3 percentage points lower y-o-y. This was offset by higher profit contribution from project works and maintenance services arising from the revenue increase.

 

As at Dec 31, 2023, cash and cash equivalents stood at $112.3 million.

 

No dividend was declared for the period.

 

In its outlook statement, Pec noted that energy and chemical companies are expected to become more cautious in spending amid the increasing market uncertainty and softening energy prices.

 

That said, national energy and chemical companies in the Middle East are expected to continue their capital expenditures (capex) to expand their production capacities as well as to pursue low-carbon projects in a bid to diversify their business and lessen their dependence on hydrocarbons.

 

&ldquo To support our clients in the energy transition, and capture opportunities in green energy, the group is working hard to build up engineering capabilities and track record in the area. The group will continue to invest in training its workforce and driving digitalization to improve operational efficiency and deliver our projects safely, on time, and within budget,&rdquo says Sec in its Feb 8 statement.

 

As at Dec 31, 2023, the group&rsquo s order book stood at approximately $100.2 million, excluding maintenance contracts.

Pec Limited IX2 0%   has reported earnings of $2.9 million for the 1HFY2023 ended Dec 31, 202, 43% lower than the earnings of $5.0 million in the corresponding period the year before.

 

Revenue fell by 2% y-o-y to $191.0 million due to lower revenue from its maintenance services segment.

 

Gross profit increased by 4% y-o-y to $44.4 million as its gross profit margin increased by 1 percentage point y-o-y to 23%. The higher gross profit and GPM were mainly due to project completions.

 

During the period, the group saw a write back of $15,000 on financial assets and contract assets from the $525,000 in impairment losses in the same period the year before. The impairment in 1HFY2022 was mainly arising from an estimated credit loss assessment on overdue receivables.

 

Profit before tax fell 31% y-o-y to $5.6 million.

 

As at Dec 31, 2022, cash and cash equivalents stood at $138.5 million.

 

No dividend has been declared.

 

In a separate announcement on the same day, Pec said that it was awarded new contracts worth some $128.0 million for various engineering, procurement & construction (EPC) and construction projects for both local and overseas companies. The contacts were awarded since July 1, 2022.

 

One of the contracts requires Pec to provide mechanical works for an existing multinational corporation (MNC) client, while another is for the provision of early EPC project works for a storage terminal in the United Arab Emirates (UAE). The other contracts include project works for clients in Thailand.

 

&ldquo The award of these contracts demonstrates clients&rsquo confidence in our ability to deliver the projects on time and successfully,&rdquo says Robert Dompeling, PEC&rsquo s group CEO.

 

&ldquo The geopolitical landscape has created uncertainties in the year ahead. However, the oil & gas sector will continue to play a major role in the global energy system and oil and gas companies will continue to maintain their focus on investing in security of supply in the short term while transitioning to cleaner energy in the long term,&rdquo he adds.

 

Looking ahead, Dompeling said the group is &ldquo cautiously optimistic&rdquo about its prospects in the near to medium term.

 

&ldquo To capture a share of the potential pipeline of projects coming onstream, the group is building a new fabrication facility in Abu Dhabi, UAE to support the group&rsquo s EPC works, maintenance services and modular solutions for offshore and onshore projects as well as green energy projects in the Middle East and around the region,&rdquo he continues.

 

Barring any unforeseen circumstances, the latest contracts are expected to contribute positively to the group' s earnings for the financial year ending June 30, 2023.