Boustead Projects reports fiscal 1H swung to profit as construction projects resumed

In October 2021, Boustead Projects' Boustead Industrial Fund, which counts Metro Holdings among its investors, entered a deal to acquire the 351 Braddell Road property in Singapore. Credit: Metro HoldingsIn October 2021, Boustead Projects' Boustead Industrial Fund, which counts Metro Holdings among its investors, entered a deal to acquire the 351 Braddell Road property in Singapore. Credit: Metro Holdings
  • Boustead Projects fiscal first half swings to profit after year-ago lockdowns
  • E&C segment showing improvement
  • Real estate segment planning to jointly set up a Vietnam fund

Boustead Projects reported Thursday its fiscal first half swung to a net profit of S$5.9 million from a year-ago loss of S$2.2 million, as higher profit in the engineering and construction (E&C) segment partly offset lower contributions from the real estate segment.

Revenue for the six months ended 30 September climbed 104 percent on-year to S$179.1 million, mainly on a resumption of E&C projects in the period after the year-earlier four-month Covid-related shutdown, the company said in a filing to SGX.

“The strong recovery in total revenue was partially offset by lower real estate revenue, which was expected after the completion of sale of interests in 14 leasehold properties to Boustead Industrial Fund (BIF) in March 2021,” the company said.

Boustead Projects owns a 25 percent stake in BIF and acts as its manager.

E&C

The company said it landed a pipeline of new E&C contracts and other projects valued at around S$75 million since the start of the fiscal year, with a current order backlog at S$280 million.

Thomas Chu, managing director of Boustead Projects, said that while the E&C operating environment is still challenging amid pandemic-related costs, the segment is showing initial signs of recovery and returned to profitability in the period.

“We expect the prospects for the E&C business segment to progressively improve as we complete the last of the pre-pandemic projects by early FY2023 and see better levels of business development opportunities as borders gradually reopen,” Chu said in the statement.

Real Estate

Boustead Projects said the real estate segment was cushioning the pandemic’s impact on the company.

Wong Yu Wei, executive deputy chairman of Boustead Projects, said the real estate segment was providing stability with recurring income, and was “unlocking value” with divestments, including the recent sale of the 351 Braddell property to BIF.

Boustead Projects said it has signed an option agreement to acquire 49 percent of a planned KTG & Boustead Industrial Logistics Fund in Vietnam from Khai Toan Joint Stock Company (KTG). The company noted the strict pandemic-related lockdown in Vietnam has delayed some due diligence work, but the deal’s completion is expected by early fiscal 2023

“With the KTG & Boustead Industrial Logistics Fund in Vietnam, we envisage our real estate portfolio to grow strategically within the key industrial zones in the Greater Hanoi and Greater Ho Chi Minh regions, while further exercising our expertise in developing these logistics and industrial park facilities,” Wong added.

Outlook

Boustead Projects said it expected to remain profitable in fiscal 2022, barring unforeseen circumstances and further pandemic-related disruptions.