Union Steel has reported lower earnings of $6.1 million for the 1HFY2025 ended Dec 31, 2024, compared to the $7.04 million declared in the same period a year before.
Earnings per share came in lower at 5.15 cents for the reporting period, compared to the 5.96 cents in the same period a year before.
Revenue for the 1HFY2025 rose marginally to $58.6 million from $53.5 million a year ago. The group says that this growth was driven primarily by a stronger performance in the metals and engineering segments, partially offset by a lower contribution from the scaffolding segment.
However, gross profit declined to $15.8 million from $16.4 million a year ago.
The group says that this decline in gross profit is due to lower contributions from the scaffolding segment and softer pricing for both new steel and scrap metal within the metals segment, amid intense market competition.
Consequently, the group’s gross profit margin contracted from 30.6% in 1HFY2024 to 26.9% in 1HFY2025.
See also: Jardine Matheson posts loss of US$468 mil, but underlying net profit stood at US$1.47 bil
Other income increased by 21.2% or $0.7 million from $3.3 million in 1HFY2024 to S$4.0 million in 1HFY2025, mainly attributable to the increase in bad debt recovery.
Administrative expenses rose by 10.7% to $9.3 million in 1HFY2025, due to a $0.4 million increase in staff related costs driven by a general increment in payroll and a higher headcount to support the expansion of the engineering segment.
The group also incurred a $0.3 million in professional fees related to the acquisition of an associated company and recorded higher depreciation charges of $0.2 million for a new building acquired during the financial period under review.
Union Steel’s cash and cash equivalents increased by $1.3 million compared to the previous corresponding period.
The net gearing of the Group increased to 30.7% as at Dec 31, 2024 from 16.3% in the
previous corresponding period, mainly due to the new bank borrowings.
Shares in Union Steel closed flat at 55.5 cents on Feb 12.
