BRC Asia's full-year net profit down 36% amid Covid-19 disruptions

MAINBOARD-LISTED steel dealer BRC Asia's full-year net profit fell 35.5 per cent to S$20.4 million, from S$31.6 million a year earlier, amid disruptions due to Covid-19.

Revenue for the 12 months ended Sept 30, 2020 dropped 32.9 per cent to S$612.4 million, from S$913.3 million a year ago, on "substantially lower sales volume due to severe disruptions during and after the 'circuit breaker'," it said in a bourse filing on Saturday.

Earnings per share stood at 8.72 Singapore cents, down from 13.53 Singapore cents a year ago.

BRC Asia proposed dividends of six Singapore cents a share, representing a payout of 68.8 per cent.

As at Sept 30, the group's sales order book stood at approximately S$1 billion, it said, adding that the duration of projects in its book ranges up to five years and may be subject to further changes.

Year on year, gross profit declined by 13.6 per cent to S$66.2 million; while gross profit margin rose to 10.8 per cent, from 8.4 per cent a year ago. The rise in gross profit margin was mainly due to the lower costs from bulk raw materials purchases, said BRC Asia.

Its balance sheet remained "strong" with net assets of S$264.6 million, with a net asset value per share of 113.38 Singapore cents.

Seah Kiin Peng, chief executive of BRC Asia, said in a statement that the group managed to control the magnitude of the decline in earnings, due to an astute management and a strong performance in the first half of its financial year.

"From early July 2020, we stood ready to support our customers' projects as they progressively restarted their respective works; and by the second half of August 2020, our manufacturing activities had recovered to economically-viable levels," he added.

Nevertheless, the group will remain cautious about the outlook for the industry, he said, since general economic activity is likely to remain subdued until a permanent solution for the pandemic is found.

Mr Seah added: "We need to stay vigilant and diligent to deal with several potential complexities such as limited labour resources and credit risk.

"BRC will navigate safely through the uncertain times that are still ahead of us."

Shares of BRC Asia closed up one Singapore cent, or 0.73 per cent, to S$1.39 on Friday before the results were announced.