Nordic Group reports 3Q19 net profit fell 12 percent

Nordic Group reported Friday its third quarter net profit fell 12 percent on-year to S$2.93 million on lower revenue and lower margins.

Revenue for the quarter ended 30 September fell 2 percent on-year to S$20.89 million, mainly on lower revenue from project services due to fewer projects during the quarter, offset by increases in the maintenance services segment, the company said in a filing to SGX.

The gross profit margin fell to 22.1 percent from 26.6 percent on specific projects with lower margins during the quarter, Nordic said.

Other income and gains rose 22 percent on-year to S$1.55 million, mainly on an increased foreign exchange gain and other payables written back, the company said.

Finance costs fell 20 percent to around S$349,000, mainly on less borrowing and lower interest rates, Nordic said.

For the nine-month period, Nordic reported net profit fell 35 percent on-year to S$7.22 million on revenue of S$61.44 million, down 12 percent on-year.

Nordic issued a mixed outlook.

“The group’s businesses serving largely the marine, oil and gas industries remain challenging. Amidst persistent weak oil prices, fluctuations in the exchange rate of the United States dollar against the Singapore dollar and the contagion effect from the fallout of some of the local oil and gas players, the group’s growth will be affected,” Nordic said in the statement.

“However, the group is optimistic with the contract wins secured to date, the prudent cost and risk management initiatives undertaken and the opportunities for further M&A, the group will continue to deliver value to shareholders,” it added.

Outstanding orders are around S$74.1 million, comprising S$40.2 million from project services and S$33.9 million from maintenance services as of end-September, Nordic said. Order deliveries are spread over the next 36 months, Nordic said, adding it expects sustained revenue streams from the orders through 2021.

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