SINGAPORE (May 15): Yongnam Holdings, the structural steel supplier and engineer, sunk into a 1Q net loss of $1.5 million on lower margins and overhead costs not being fully absorbed given the group’s lower level of strutting and fabrication activities.
Group revenue increased 24% to $91.5 million due mainly to higher contributions from the structural steelworks business.
Revenue contribution from structural steelworks surged 49.6% to $67.7 million in 1Q17, supported by key projects including Senoko Food Hub and Jewel Changi Airport. Revenue from the Specialist Civil Engineering unit stood at $19.7 million, unchanged from a year ago. Key revenue contributors during the review quarter included the Thomson Line in Singapore and Hong Kong MTR.
Mechanical Engineering saw its revenue contribution decline to $1.3 million from $8.5 million due to the substantial completion of the two Middle East projects involving the supply and fabrication of Heat Recovery Steam Generator non-pressure parts for two power plants located respectively in Qatar and Egypt by the end of FY2016.
As at March 31, 2017, the group’s order book stood at $218 million.
Upcoming mega public sector infrastructure projects in Singapore this year, which the Group has bid for, include various major contracts for the Circle Line 6, North-South Corridor and Deep Tunnel Sewerage System (DTSS) Phase 2.
Public sector demand is expected to be supported by various upcoming mega infrastructure projects such as the Jurong Regional Line, Cross Island Line, the Kuala Lumpur – Singapore High Speed Rail and various infrastructure developments for Changi Airport Terminal 5.
Shares of Yongnam closed at 20 cents.
