ISOTeam (5WF) H2 2023 earnings summary

Executive summary

• Returned to profitability in FY2023 after three years of losses, with attributable profit of S$1.4 million versus a S$13.2 million loss in FY2022; recovery reflected focus on core construction-related businesses and post-Covid demand.

• Revenue rose 14.4% YoY to S$110.4 million; gross margin more than doubled as low-margin pandemic-era contracts were completed.

Financial highlights

• FY2023 revenue was S$110.4 million, up 14.4% YoY; gross profit rose 149.8% to S$11.1 million.

• Attributable profit was S$1.4 million versus a S$13.2 million loss in FY2022; EPS was 0.40 cents versus a 3.80-cent loss.

• Other income fell 31.8% to S$4.6 million, while general and administrative expenses declined to S$11.3 million from S$12.1 million.

• Finance costs increased 33.4% YoY to S$2.3 million on trade facility utilisation and higher interest on bank borrowings.

Outlook and guidance

• Margins expected to continue normalising as demand rises with anticipated growth in public- and private-sector construction projects over the next few quarters.

• Cautiously optimistic on construction conditions, while rising manpower and material costs and interest rates may pressure project costs and borrowing costs.

• Order book of S$175.8 million at 30 June 2023 is expected to support activity until FY2026; an additional S$21.5 million of contracts is due for delivery by July 2025.