Wednesday, May 18, 2011


SINGAPORE, 18 May 2011 – Mainboard-listed CSC Holdings Limited (“CSC” or the “Group”) has recorded a 17.0% increase in year-on-year revenue to $333.4 million for the financial year ended 31 March 2011 (“FY11”) despite a slow fourth quarter (“4Q11”). Other Income for FY11 was significantly higher at $4.4 million compared to $1.0 million in FY10, largely due to higher equipment rental activities, higher recorded gains from the sale of old equipment, and other miscellaneous construction related income.

However, this was offset by a 20.1% increase in Other Operating Expenses to $22.9 million from $19.1 million incurred in FY10. The increase in Other Operating Expenses was largely attributable to higher costs associated with increased revenue from the Group's equipment distribution arm and the hiring of additional technical staff to cater for the increase in volume of work during the financial year.

The Group also had to contend with an increasingly intense level of competition within the industry and price hikes in key construction materials, especially ready mixed concrete, resulting in lower margins from the projects secured in FY11 than in FY10. The Group registered a decline in net profit to $7.9 million in FY11 from $26.0 million in FY10.

The net profit for FY11 was also largely affected by the provision for doubtful debts of $7.9 million arising from the Changi MotorSports Hub project. In consideration of the Group’s profitable performance, the Directors of CSC have recommended a tax exempt one tier final ordinary dividend of 0.10 Singapore cents. This is in addition to the interim dividend of 0.40 Singapore cents paid out in December 2010. The total dividend to be paid out for FY11 would amount to 0.50 Singapore cents.

sgxstockpicker says: This is a small cap construction stock. Upside in earnings looks quite limited and I think that it should be in the downtrend. The slump in infrastructure spending as well as the hike in foreign workers' levy means pressure on both top and bottom line. 

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