Mun Siong Engineering (MF6) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 12.5% to S$71.2m, but gross margin fell to 5.9% and the Group recorded a S$2.5m loss before tax versus S$0.8m profit in FY2022.

• Singapore drove most revenue growth; operating losses in Taiwan and the US, alongside higher costs, weighed on results and reduced cash balances.

Financial highlights

• Revenue was S$71.207m versus S$63.290m in FY2022; gross profit declined to S$4.197m from S$6.502m.

• Gross margin was 5.9% versus 10.3%; loss before tax was S$2.486m versus profit before tax of S$0.809m.

• Net loss was S$2.805m versus net profit of S$0.371m; basic and diluted EPS were both a loss of 0.48 cents versus earnings of 0.06 cents.

• Other income included a S$776k gain on disposal of property, plant and equipment and S$789k in government grants.

Outlook and guidance

• Malaysia operations are expected to retain opportunities; the HIMS master service agreement with PRefChem was extended for 3 years to 14 March 2027.

• The US subsidiary secured a mid-sized refinery turnaround cleaning contract for FY2024 after qualifying with 11 clients; the refinery has capacity of ~270,000 bbl/day.

• Singapore contract renewals due in FY2026 will be highly price-sensitive amid steep manpower and operating cost increases; future capital commitments may be deferred if needed.