Tiong Seng has reversed into earnings of $3.5 million for the 2HFY2023 ended Dec 31, 2023, compared to the loss of $40.7 million in the corresponding period the year before. The earnings was due to higher revenue and lower operating expenses.
Revenue for the 2HFY2023 grew by 52% y-o-y to $314.4 million on higher revenue from construction contracts and engineering solutions and higher rental income. This was, however, offset by lower revenue from sales of development properties. The higher revenue from construction contracts and engineering solutions was due to the resumption of construction work.
Meanwhile earnings for the FY2023 still stood at a loss of $12.1 million, although this is an 86% improvement from the loss of $84.7 million in the FY2022.
FY2023 revenue rose by 34% y-o-y to $475.0 million as the increases in revenue from construction contracts and engineering solutions and rental income more than offset the decrease in revenue from sales of development properties
Earnings per share (EPS) for the 2HFY2023 and FY2023 stood at 0.80 cents and a loss of 2.75 cents respectively.
As at Dec 31, 2023, Tiong Seng has $41.4 million worth of assets held for sale. The bulk of it is expected to be sold in FY2024.
“These capital recycling efforts will provide additional liquidity to boost the group’s balance sheet status and allow Tiong Seng to pursue and complete new projects,” says the group in its Feb 28 statement.
As at Dec 31, 2023, cash and cash equivalents stood at $112.6 million.
“We are optimistic about the future, with the group turning profitable in 2HFY2023. This is due to the collective efforts of every member of the Tiong Seng family focusing on cost reduction while concurrently enhancing operational efficiency. As we come to the tail-end of loss-making projects that have hampered the group’s performance over the last three years, Tiong Seng is now in a strong position to actively pursue new projects where we have a competitive advantage,” says Pay Sim Tee, CEO of Tiong Seng Holdings BFI .
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“Our intention to actively divest non-core assets to strengthen our balance sheet highlights the determination of the group to overcome these challenging times and emerge stronger and more resilient from the industry down cycle.”
"Moving forward, we stand at a pivotal point in our transformation journey, poised to return to steady growth in 2024. Having emerged stronger from navigating a myriad of challenges, we remain cautiously optimistic about our prospects in the year ahead,” he adds.
Shares in Tiong Seng closed 0.3 cents lower or 4.62% down at 6.2 cents on Feb 28.