CSE Global 544 0.00%   announced that its FY2022 ended Dec 31, 2022, earnings have declined by 68.2% y-o-y to $4.77 million from $15.0 million a year ago, mainly due to higher operating expenses.

 

Revenue for the period was higher by 19.0% at $557.7 million from $468.7 million last year. This was mainly due to growth in infrastructure project revenues in Australia and the Americas region.

 

Despite higher revenues, net profit declined by 68.2% y-o-y to $4.8 million, mainly impacted by lower gross margins from higher project execution costs and cost overruns, as well as higher operating expenses.

 

In line with higher revenues, gross profit increased by 7.6% y-o-y to $146.2 million. Gross margin decreased by 2.8% to 26.2% in FY2022, impacted by increase in project execution costs due to supply chain disruptions and cost overruns from some projects resulting in lower gross margin, particularly in the Americas region.

 

In the 2HFY2022, the group restructured a business division in USA in line with periodic reviews of its various business operations around the world. Post-exercise, a one-off restructuring cost of $1.3 million was incurred in order to focus on profitable income streams for the future. The group also recorded cost overruns in two projects, whereby the costs to execute these were under-accounted for. These factors led to a drop in net profit for the FY2022 period.

 

Total operating expenses was 19.1% higher y-o-y at $138.0 million from $115.9 million a year ago. This was due to higher personnel costs, a one-off restructuring cost, higher selling and distribution expenses, increase in upkeep of building and equipment costs and impact of newly acquired subsidiaries.

 

Cash and cash equivalents as at end-December stood at $24.1 million.

 

CSE Global&rsquo s board has declared a final cash dividend of 1.5 cents per share, unchanged from the previous year. Together with the interim dividend of 1.25 cents paid out in 1HFY2022, the group&rsquo s total dividend paid out for the FY2022 period stands at 2.75 cents.

 

Lim Boon Kheng, group managing director of CSE Global says: &ldquo FY2022 was an exciting year for CSE Global, where we saw our diversification strategy pay off through the y-o-y growth in revenue and orders. We successfully completed our rights issue with the support of our shareholders, as well as the acquisition of Logic Wireless and Radio One Group, which will further strengthen our offerings in the radio communications solutions space.

 

While CSE Global saw significant growth in new orders received during the year, our margins have been impacted by an increase in project execution costs due to ongoing supply chain disruptions and project cost overruns. Looking ahead, we will be laser-focused on integrating our latest acquisitions and executing backlog orders while closely monitoring our costs.&rdquo

TECHNOLOGY solutions provider CSE Global : 544 -1.32% secured S$220.8 million worth of new orders in its fourth quarter ended Dec 31, 2022, up 68.3 per cent from the same period a year earlier.

 

This was mainly attributable to higher orders secured in the US and Singapore, particularly from the infrastructure sector, the company said in a bourse filing on Wednesday (Feb 15).

 

Some S$131 million of new orders were secured by the group&rsquo s infrastructure sector, as compared to S$32.1 million in the same period in 2021. This was mainly due to a multi-year system maintenance contract secured from the Singapore government, as well as higher orders secured for the wastewater market in the Americas region, the company said.

 

Meanwhile, new orders for the group&rsquo s energy sector fell 8 per cent on year to S$78.7 million, while new orders for its mining and minerals sector fell 17.8 per cent on year to S$11.2 million, mainly due to delays in the award of radio communication projects in Australia.

 

Lim Boon Kheng, group managing director of CSE Global, said infrastructure remains a key focus area for the company, and noted that the strong growth in new orders secured for the sector is likely a result of the company&rsquo s efforts to diversify its business.

 

&ldquo That said, the continued supply chain disruptions are expected to prolong project execution timeframes and have an impact on our gross margins,&rdquo he added.

 

In a separate filing, CSE Global said it expects to report significantly lower net profit for its second half (H2) of FY2022, following a periodic review of its various business operations around the world.

 

In H2, the company restructured a business division in the US and incurred a restructuring cost of S$1.3 million. It also recorded a loss of S$5.9 million after the restructuring, due to cost overruns in two projects as a result of under-estimation.

 

CSE Global noted that it continued to execute its diversification strategy in FY2022. While this resulted in an increase in new orders and lowered revenue exposure from customers in the energy segment, the diversification has increased the company&rsquo s overhead costs and lowered its profits for the year.

 

The company said it still expects to report an overall net profit for the full year ended Dec 31, 2022. It will release its unaudited consolidated financial results for the second half and full year on or before Feb 27, 2023.