Nordic Group (MR7) H2 2023 earnings summary

Executive summary

• FY2023 revenue was S$160.6 million, down 1% YoY, while net profit was S$16.0 million, down 23% YoY; maintenance revenue growth supported resilience.

• A S$187.1 million outstanding orderbook provided revenue visibility for up to 36 months, subject to customer cancellation, deferral, rescheduling or variation.

Financial highlights

• FY2023 gross profit fell 20% YoY to S$36.4 million; gross margin declined 5.4 ppts to 22.7%.

• FY2023 EBITDA was S$27.5 million, down 13% YoY; EBITDA margin was 17.1%, down 2.3 ppts.

• FY2023 basic EPS was 4.0 cents, down 25% YoY; net profit margin fell 2.9 ppts to 9.9%.

Outlook and guidance

• Order deliveries are expected to fall mainly within the next 36 months; the orderbook comprised S$61.6 million in Project Services and S$125.5 million in Maintenance Services.

• Longer project tenures and completion of large projects may pressure results over the next 12 months; long-term prospects across served sectors remain positive.

• Contract wins, cost and risk management, the Avon Industries acquisition and potential further M&A were cited as supports for long-term growth.