Global Resource Construction (S3N) H1 2023 earnings summary

Executive summary

• H1 FY2023 revenue rose 6.0% YoY to S$8.64m, while profit fell 98.8% to S$62k, mainly reflecting a S$3.00m investment-property fair-value loss and higher G&A expenses.

• Cash and bank balances ended the period at S$15.56m; net cash from operating activities was S$3.08m.

Financial highlights

• Gross profit increased 6.9% to S$7.24m from S$6.77m; other income declined to S$65k from S$925k, partly due to the absence of a one-off disposal gain and lower grant income.

• G&A expenses rose 76.5% to S$2.80m, primarily due to SLA rental expense; finance costs fell 24.3% to S$1.44m as lower borrowings partly offset higher interest rates.

• Profit before tax was S$65k versus S$5.23m; income tax expense was S$3k versus a S$37k credit, and net profit was S$62k versus S$5.26m.

• Operating cash flow was S$3.08m, investing cash inflow S$861k and financing cash outflow S$2.94m; cash increased S$1.00m to S$15.56m.

Outlook and guidance

• Property sales remained slow, while rental income had grown over recent years and stabilized; many customers preferred leasing to buying amid global uncertainty.

• A continuing review of development and investment properties may lead to asset sales to strengthen finances and support exploration of new business opportunities.