OKP Holdings has reported earnings of $21.8 million for the 2HFY2024 ended Dec 31, 2024, a 142.7% growth from 2HFY2023's $8.98 million.
Despite this, the group's FY2024 earnings fell 24.5% y-o-y $33.7 million from the previous full-year earnings of $44.6 million. This was largely due to the absence of a one-off gain of $43.8 million from an arbitral award.
The decrease was also due to reduced government grants, a decrease in fair value gain on investment properties, a decline in gain on disposal of fixed assets and an increase in foreign exchange (forex) losses.
With this, earnings per share (EPS) for the FY2024 came in at 10.98 cents, a 24.5% drop from 14.54 cents in the same period a year ago.
Meanwhile, FY2024 revenue increased 13.3% y-o-y to $181.8 million, mainly boosted by higher contributions from the OKP's construction and maintenance segment, which more than offset a decrease in the group's rental income.
Additionally, OKP's gross profit surged by 135.4% y-o-y to $58.2 million in FY2024 from $24.7 million in FY2023, while the group's gross profit margin improved by 16.6 percentage points (ppts) to 32.0%. The higher gross profit margin was mainly attributed to the OKP's ongoing initiatives to enhance efficiencies, productivity and cost management, despite higher overhead costs and rising manpower costs.
With the set of results, OKP has recommended a final dividend of 2.5 cents per share, consisting of final dividend of 1.0 cent per share and a special dividend of 1.5 cents per share.
As at Dec 31, 2024 OKP's net tangible assets (NTA) per share was 65.60 cents, versus its closing price of 39.5 cents on Feb 25.
As at the same period, the group's order book was $600.7 million, with projects extending till FY2027, up from $518.6 million this time last year.
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Outlook
Based on projections from the Building and Construction Authority (BCA) released on Jan 23, construction demand in Singapore is expected to increase this year, with the value of construction contracts to be awarded ranging between $47 billion and $53 billion. The strong demand is underpinned by the expected award of contracts for several large-scale developments, including Changi Airport Terminal 5 and the expansion of the Marina Bay Sands Integrated Resort, alongside public housing development and upgrading works.
Looking ahead, OKP highlights that it expects global challenges, including the higher-for-longer interest rate environment and geopolitical risks, to continue. Nevertheless, the group remains focused in building a sustainable and resilient business to navigate challenges effectively.
In 2024, the group secured five projects, amounting to a total of around $257.2 million.
On the property development front, following the sale of all 74 units of OKP’s residential project in Bukit Panjang, Phoenix Residences, the project has attained its temporary occupation permit (TOP) on Jan 3. In addition, the group’s joint venture has completed the residential project, The Essence. As for property investment, OKP's investment property situated at 6-8 Bennett Street in Perth, Australia, continues to generate recurring rental income.
Supported by a decades-long track record and industry expertise, OKP notes that it remains steadfast in its strategy to diversify earnings and build recurring income streams. The group will also pursue strategic partnerships to strengthen its foothold in property development and investment ventures.
Or Toh Wat, OKP's group managing director, says: "By forming strategic partnerships, particularly within our property development and investment business, we strive to achieve greater diversification to enhance financial stability and advance sustainable growth.” the company will continue to focus on its core expertise to tender for more projects, leveraging on robust construction demand from both the public and private sectors."
Shares in OKP Holdings closed 1 cent higher or 2.60% up at 39.5 cents on Feb 25.
