Alpina Holdings announced losses of $230,000 for its FY2023 ended December 2023, compared to earnings of $2.0 million in FY2022. The group listed on the Catalist Board of the Singapore Exchange S68 (SGX) in January 2022.
The group fell into a loss, as its financial performance was impacted by higher labour costs for the contracts secured during the Covid-19 pandemic.
“The post-pandemic period saw pent-up demand amongst sectors impacted by Covid-19 and as a result, our operating environment faced persistently higher labour and subcontracting costs over the past few years. As a commitment to our customers and to meet project deadlines, the group had to hire additional manpower and subcontractors, particularly for projects secured prior to the Covid-19 pandemic, which impacted our financial performance in recent years,” says Alpina’s executive chairman and CEO Low Siong Yong.
Despite the losses, revenue saw a 28.6% y-o-y growth to $64.2 million from $49.9 million a year ago, thanks to the commencement and completion of more projects in FY2023.
All three business segments of the group registered revenue growth in FY2023, with the integrated building services (IBS) business segment continuing to be main revenue contributor.
Revenue from the group’s IBS business segment increased by 20.7% y-o-y to $40.75 million, mainly due to an increased number of projects completed during FY2023. The group’s mechanical and electrical (M&E) business segment registered a 54.1% y-o-y increase to $13.33 million, mainly due to the commencement of several projects during the second half of FY2023. For the group’s alteration and addition (A&A) business segment, revenue increased by 34.7% y-o-y to $10.08 million, mainly due to the substantial completion of a project during FY2023.
See also: Kimly reports higher FY2024 revenue but earnings down on higher depreciation and other costs
Operationally, the group’s IBS and M&E business segments remained profitable in FY2023 while the A&A business segment registered gross losses, due to the hiring of additional manpower resources and subcontractors to complete such contracts on a timely basis.
In FY2023, the group recognised other income of $1.44 million, which was an increase of 22.6% y-o-y, mainly due to a gain on disposal of property, plant and equipment and an administrative charge to a subcontractor.
As at end December, the group’s cash and cash equivalents stood at $7.05 million.
See also: LHN reports higher FY2024 earnings on fair value gains and better operations (update)
“The group secured 21 new contracts with an aggregate provisional contract value of approximately $251.10 million in FY2023, which will provide us with earnings visibility for the near future,” says Low, adding that these contracts will be progressively completed from April 2024 to March 2029. To recap, Alpina in January this year announced that its project pipeline has been boosted with eight new contracts worth $34.2 million in 2HFY2023.
The group will continue to proactively tender for more projects and aims to strengthen its business model for sustainable growth.
While there is no formal dividend policy for now, Alpina had previously mentioned that it plans to pay at least half its FY2022 and FY2023 earnings to shareholders. It did not distribute dividends for the FY2023 period, as compared to FY2022, which saw a final dividend of 0.1085 cent and an interim dividend of 0.4339 cent.
“The board of directors of the company has decided that, in view that the group had incurred net losses in respect of FY2023 and the present uncertainty in the market outlook and business environment, it would be prudent not to declare a final dividend in respect of FY2023,” it said in its financial statement.
Shares in Alpina closed at 17.9 cents, down from its IPO price of 31 cents.
