Keong Hong (5TT) H1 2024 earnings summary

Executive summary

• 1HFY2024 revenue fell 40.9% YoY to S$69.8m; gross loss was S$1.7m and net loss after tax widened to S$9.5m from S$4.4m.

• Operating cash outflow was S$1.3m and working capital was negative S$4.0m at 31 March 2024; management cited credit facilities, shareholder support and forecast operating cash flows as going-concern supports.

• Construction order book stood at ~S$446m, with residential projects 46% of the portfolio; Phase 1 TOP at Grand Hyatt Hotel Singapore was received in April 2024.

Financial highlights

• Revenue decreased 40.9% YoY to S$69.8m, mainly due to lower construction revenue after The Antares, Wilshire Residences, Sky Everton and National Skin Centre Phase 1 obtained TOP in FY2023.

• Cost of sales declined 39.2% to S$71.5m; gross loss was S$1.7m versus gross profit of S$0.4m in 1HFY2023.

• Other income fell to S$4.2m from S$12.3m, largely reflecting the prior-period S$7.8m gain on investment property disposals; admin expenses declined to S$7.0m from S$13.9m.

• Loss before tax was S$9.5m versus S$4.6m; net loss was S$9.5m versus S$4.4m, and basic and diluted loss per share was 4.05 cents versus 1.58 cents.

• 1HFY2024 total comprehensive loss was S$8.8m, including S$0.7m other comprehensive income from foreign currency translation and FVTOCI gains.

Outlook and guidance

• Construction pipeline comprised Sky Eden @ Bedok, Solitaire on Cecil and Tengah Plantation; plans included continued tendering for new contracts.

• Private property opportunities will continue to be assessed while remaining prudent on land acquisitions; elevated interest rates have made home buyers more cautious.

• Maldives resort operations face rising finance and operating costs; work with Accor is focused on improving performance at Mercure Maldives Kooddoo and Pullman Maldives Maamautaa.

• Singapore MTI maintained its 2024 GDP growth forecast at 1%–3%; geopolitical risks and elevated interest rates remain uncertainties.