OKP Holdings reported a 29.3% increase in revenue to $90.0 million for FY2021, for the year to Dec 31, compared to $69.6 million in FY2020, mainly due to higher contributions from the construction and maintenance segments as well as an increase in rental income.
However, net profit more than halved to $1.5 million in FY2021, from $3.3 million in FY2020.
The overall increase in the Group’s revenue in FY2021 was largely due to increases of 22.8% and 53.1% in revenue from the construction segment and maintenance segment respectively, as well as a 11.9% increase in rental income. The increases in the construction and maintenance segments’ revenue to $56.5 million and $26.4 million respectively, were mainly due to the higher percentage of revenue recognised from a number of existing and newly awarded construction and maintenance projects during FY2021, a clear sign of recovery from lower activities in FY2020 due to temporary cessation of construction activities in compliance with the government’s COVID-19 measures. The construction and maintenance segments are the major contributors to the Group’s revenue, representing 62.8% and 29.3% of the Group’s FY2021 revenue, respectively.
The Group’s rental income from investment properties continued to see positive growth, improving 11.9% to S$7.1 million in FY2021 as compared to $6.3 million in FY2020. Overall, the Group’s rental income contributed 7.9% to the Group’s total revenue in FY2021. The increase in rental income generated from investment properties was due mainly to rental income generated from the property at 6-8 Bennett Street, East Perth, Western Australia, as well as rental income from the newly acquired investment properties at 35 Kreta Ayer Road, and 69 and 71 Kampung Bahru Road.
OKP's gross profit dipped by 7.9% to $6.8 million in FY2021 from S$7.4 million in FY2020 whilst gross profit margin decreased by 3.1 percentage points to 7.5%. The lower gross profit margin for FY2021 was largely due to lower profit margins for new and current construction and maintenance projects as a result of the increase in overheads, prices of materials and rising manpower costs. Other gains had decreased by $3.0 million to $7.7 million in FY2021, from $10.7 million in FY2020. The decrease was mainly due to the decrease in receipt of payouts and rebates from the government, a one-off reversal of impairment allowance following the disposal of a former associated company in FY2020 which did not recur in FY2021, a decrease in interest income and a decrease in the gain on foreign exchange, partially offset by an increase in net fair value gain.
OKP's balance sheet remains strong with net tangible assets (NTA) of $123.5 million while NTA per share was 40.25 cents as at Dec 31, compared to OKP's share price of $0.19 as at Feb 21. KP’s free cash and cash equivalents stood at $45.8 million as at end-2021, compared to $74.0 million a year ago. Earnings per share (basic) for FY2021 stood at 0.49 cents, as compared to 1.07 cents in FY2020.
During the year, the Group clinched four projects from PUB totalling $154.6 million. As of Dec 31, 2021, the Group’s order book stood at $329.2 million, with projects extending till 2025.
On the property development front, the Group’s joint venture residential project, The Essence, which was launched in March 2019 and achieved favourable sales, is now fully sold. The Group’s 74-unit residential project in Bukit Panjang, Phoenix Residences, is expected to TOP in November 2023. As of Feb 21, approximately 38% of the 74 units have been sold.
See also: IHH Healthcare’s 3QFY2024 patmi remains flat at RM534 mil
OK's investment property at 6-8 Bennett Street in Perth, Australia continues to generate good recurring rental income. As part of the Group’s effort to grow its recurring income through a portfolio of investment properties, the Group had completed the acquisitions of 35 Kreta Ayer Road, and 69 and 71 Kampong Bahru Road in 2021. Both acquisitions have contributed positively towards the Group’s performance.
