King Wan Corporation (554) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 3.3% YoY to S$95.5m; profit attributable to owners was S$12.4m versus a S$4.8m loss in FY2023, supported by higher gross profit and associate/JV earnings.

• Profit included S$19.6m share of associate/JV profit, largely from a fair value gain on Nexus investment properties; excluding that share, attributable loss was S$7.2m.

Financial highlights

• Gross profit was S$1.31m versus S$0.46m; gross margin improved to 1.4% from 0.5%, reflecting quoted-equity dividend income and better post-pandemic project margins, partly offset by pre-pandemic cost overruns.

• Net assets rose to S$70.0m from S$62.1m; cash and cash equivalents fell to S$9.1m from S$11.0m.

• Operating cash flow was S$3.27m versus a S$6.38m outflow; cash ended FY2024 at S$9.06m after a S$1.96m net decrease.

• Total comprehensive income was S$7.94m; S$4.47m fair value loss on FVTOCI equity securities reduced comprehensive income.

Outlook and guidance

• M&E services face a challenging next 12 months amid rising costs and uncertainty, but secured order books are expected to sustain income; focus remains on cost strategy, prudent financial management and risk mitigation.

• No FY2024 dividend was recommended to preserve working capital and prioritize operating needs amid challenging economic conditions and higher construction and financing costs.

• The remaining completed PRC properties will be marketed for sale; no new development phases will start until clear signs of property-market recovery.