BRC Asia has reported record earnings of $90.2 million for the financial year ended Sept, up 92% from the preceding FY2021.
Revenue in the same period was up 45% to $1.7 billion – a record as well -- thanks to higher steel prices and higher sales volume.
The company plans to pay a final dividend of 6 cents per share, plus a special dividend of another 6 cents per share. Together with an interim dividend of 6 cents already paid, this will bring full-year FY2022 payout to 18 cents, equivalent to a payout ratio of 54%.
As at Sep 30, the company has built an order book of $1.4 billion, to be fulfilled over the coming 5 years.
The company notes that while construction demand is strong, project progression rates island-wide seemed to have been “a fair bit slower than expected” in the second half of 2022.
The prospects of the local construction supply chain is expected to be weighed down by much higher operating costs, particularly for skilled labour and energy.
At the same time, the operating climate is likely to be complicated and burdened by an environment of higher rates and inflation, the company warns.
CEO Seah Kiin Peng calls the FY2022 numbers “extraordinary”, but cautions that the company needs to be careful ahead.
“We face a much more challenging operating environment going forward, particularly as rising costs for electricity, manpower and financing amid an increasingly competitive landscape caused by slow site progress can be expected to erode margins throughout the construction supply chain,” he says.
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“On a more positive note, construction remains a fundamental building block for Singapore and, with the gradual resumption of delayed construction projects, local reinforcing steel demand is expected to improve from 2Q2023 onwards,” says Seah.
BRC Asia closed Nov 29 at $1.77, unchanged for the day, and up 14.94% year to date.
