Hafary's 4Q earnings fall 61.5% to $2.7 mil on lower revenue and higher costs

 Source: TheEdge Markets   |   Publish date: Fri, 17 Feb 2017, 06:16 PM   |    >> Read article in News website

SINGAPORE (Feb 17): Building material supplier Hafary Holdings has posted $2.7 million of earnings for 4Q16, a 61.5% decline from its earnings of $6.8 million in 4Q15 due to a combination of lower revenue and higher expenses.

Group revenue for the quarter was down 5.2% at $30.7 million from $32.4 million in the previous year, largely attributable to a 20.3% fall in revenue from the project segment by $3.3 million to $12.9 million, which more than offset the 10% growth in revenue from the group's general segment.

Cost of sales fell by 7.4% from $19.8 million in 4Q15 to $18.3 million in the current quarter.

Additionally, gross profit margin (based on revenue from sale of goods (excluding rental and other income), purchase cost of goods and related costs (without taking into account labour costs and overheads) of 39.1% for 4Q2016 has improved slightly compared to 37.8% for 4Q2015.

Despite the improvement in revenue and margins, employee benefits however increased by $0.4 million or 10.6% to $4.7 million during 4Q16, mainly due to annual salary increment with effect from July 2016, where there were overtime expenses incurred and an increase in headcount.

Depreciation expense for the quarter increased by 77% to $1.5 million as well, largely resulting from the commencement of depreciation of 18 Sungei Kadut Street 2 after development of the premise was completed in August 2016.

Impairment losses, which mainly comprised allowances for the impairment of inventories and trade receivables, grew by 19.8%.

In its outlook, Hafary highlights that the Building and Construction Authority of Singapore expects construction demand to improve in the years ahead.

The group says it remains vigilant to market changes, and alert to take on any opportunities locally and overseas to grow its business.

Shares of Hafary last changed hands at 17 cents on Feb 10.

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