Keong Hong (5TT) H2 2024 earnings summary

Executive summary

• FY2024 performance improved as pandemic-affected construction projects neared completion; net loss narrowed to S$3.9m from S$51.2m in FY2023.

• Positive operating cash flow and higher cash balances strengthened liquidity, while persistent losses, cost pressures and a qualified audit opinion remain significant considerations.

Financial highlights

• Revenue fell 13.6% YoY to S$172.6m, mainly as projects completed in FY2023 contributed less revenue and new projects were at early stages.

• Gross loss narrowed 79.4% to S$5.4m from S$26.4m; gross margin improved to -3.1% from -13.2% as higher-cost pandemic-era projects neared completion and cost controls took effect.

• Other income declined 48.3% to S$8.7m; FY2023 included a one-off S$7.8m gain on disposal of Japanese investment properties and higher interest income.

• Net loss after tax was S$3.9m versus S$51.2m in FY2023; FY2024 included a S$27.3m impairment reversal on an associate investment.

• Net cash from operating activities was S$8.8m, versus S$13.6m used in FY2023; cash and cash equivalents ended FY2024 at S$20.8m, up from S$14.6m.

Outlook and guidance

• Construction order book stood at S$368m at 30 September 2024, with residential projects representing 49% and commercial projects 51%.

• 2025 Singapore construction demand is forecast at S$47b–S$53b; medium-term annual demand for 2026–2029 is forecast at S$39b–S$46b.

• Priorities include pursuing construction projects with attractive returns, improving margins through cost and operational management, and maintaining liquidity and financial discipline.

• Singapore’s 2025 growth outlook is slower; global tensions, trade conflicts, inflation, tariffs and high interest rates are expected to make operating conditions difficult.