Hor Kew Corporation (BBP) H1 2024 earnings summary

Executive summary

• H1 2024 revenue declined 30% YoY on lower prefabricated building-component deliveries; higher selling prices and cost control lifted gross margin to 27.6% from 19.0%.

• Profit after tax rose to $3.1m from $1.7m, while operating cash flow reached $11.4m and borrowings declined through repayments.

Financial highlights

• Revenue was $35.285m, down 30% YoY; gross profit increased to $9.733m from $9.600m despite lower sales.

• Other income doubled to $1.553m from $0.773m, mainly on higher rental income and an exchange gain; G&A expenses fell to $3.769m from $5.102m.

• Profit before tax rose 94% to $4.029m; profit for the period increased 87% to $3.146m.

• Total comprehensive income was $3.111m, versus $0.875m; currency translation loss narrowed to $0.035m from $0.808m.

Outlook and guidance

• Actual H1 results were in line with the commentary in the FY2023 results announcement.

• Singapore construction demand is expected to remain strong; tendering focuses on projects expected to yield higher margins as older projects finish and newer projects begin deliveries.

• Borrowings are expected to be reduced progressively as much as possible using the improved cash flow position.