OKP Holdings is a leading transport infrastructure and civil engineering group, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads, airport infrastructure, and oil and gas related infrastructure for petrochemical plants and oil storage terminals. It was incorporated in Singapore on Feb 15, 2002 as an investment holding company.
1. What is OKP’s business about and what are some of its key business segments?
Founded in 1966 by chairman Or Kim Peow and listed on the Mainboard since July 26, 2002, OKP Holdings is a leading home-grown infrastructure and civil engineering company, with a foothold in property development and investment. OKP, led by managing director Or Toh Wat, operates three core business segments:
- Construction — the group’s primary revenue driver, mainly undertaking public sector projects. Notably, both its wholly-owned subsidiary corporations, Or Kim Peow Contractors and Eng Lam Contractors Co, are A1 grade civil engineering contractors, allowing them to tender for public sector construction projects of unlimited value.
- Maintenance — serves as the “bread-and-butter” of the group’s business, ensuring a stable recurring revenue stream.
- Rental income from investment properties — the group’s investments in a freehold office complex in Perth, Australia and a shophouse portfolio in Singapore generate a stream of recurring rental income, enhancing income resilience.
Backed by a strong track record and decades of industry expertise, OKP remains committed to its long-term strategy of diversifying earnings and building on its portfolio of recurring income streams.
2. OKP reported a 135.4% increase in gross profit for FY2024 to S$58.2 million, supported by higher-margin projects. What drove this?
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Notwithstanding a challenging operating environment marked by rising costs in manpower and materials, OKP achieved a 13.3% increase in revenue to $181.8 million boosted by its two core business divisions, and a higher gross profit margin of 32.0% in FY2024, up 16.6 percentage points from 15.4% in FY2023. This reflects the group’s disciplined approach to cost management and operational prudence without compromising on quality.
Strong execution remains a priority, ensuring projects are completed on time and within budget. The group remains committed to a high level of operational efficiency and will continue to improve project management, while embracing technology for greater efficiency.
3. How has OKP’s recent financial performance been?
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Backed by up to 60 years of track record and core expertise, OKP delivered good topline performance in FY2024, driven by strong performance from both the construction and maintenance segments.
Aside from topline performance, net profit attributable to equity holders of $33.7 million and net profit of $32.8 million were recorded for FY2024. Supported by a robust order book of $600.7 million, the group is well-positioned to capitalise on growth opportunities.
The group remains committed to sustaining its growth trajectory through disciplined cash flow management and financial prudence while diversifying earnings and geographical presence. By forming strategic partnerships, OKP strives to achieve greater diversification to enhance financial stability and advance sustainable growth.
4. What were key drivers behind the performance of the construction and maintenance segments?
Revenue from the construction and maintenance segments rose to $114.0 million and $61.7 million respectively, due to higher percentage of revenue recognition from various ongoing and newly awarded projects as they progressed to a more active phase in FY2024.
To sustain the growth trajectory, the group is leveraging on its decades-long track record and core expertise to capitalise on growth opportunities by tendering for both public and private projects.
5. Does OKP see opportunities to leverage its balance sheet for future growth, including acquisitions or expansions into new business segments?
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Backed by a strong balance sheet with free cash and cash equivalents totalling $124.3 million, the group is well-positioned to capitalise on growth opportunities. Its long-term strategy remains centred on leveraging its core capabilities, venturing into new overseas business, and diversifying earnings through property development and other investments.
To reinforce its strategy, the group will continue to explore strategic partnerships to strengthen its foothold in property development and investment ventures. At the same time, the group remains committed to maximising returns on investment while maintaining product and service excellence.
6. Singapore’s construction sector grew 5.9% y-o-y in 4Q 2024, driven by increased public sector construction output. How is OKP positioning itself to capture upcoming public infrastructure projects?
The group continues to be motivated by its mission — to be the first and preferred civil engineering contractor for the various industries, here and overseas. Some of the group’s past projects include large oil and gas projects including the $750 million Universal Terminal, a massive petroleum storage facility on Jurong Island, civil works relating to ExxonMobil’s multi-billion-dollar Second Petrochemical Complex project, and land reclamation works on Jurong Island, a milestone project.
In 2024, the group secured five projects amounting to a total value of approximately $257.2 million. This includes a project awarded by the Public Utilities Board (PUB) for drainage improvement works and four projects awarded by the Land Transport Authority for the improvement of road-related and commuter-related facilities, as well as construction of cycling path networks.
With its strong track record in public sector works and civil engineering projects, OKP will stay focused in capturing the upcoming public infrastructure projects to deliver value to its shareholders.
7. Rising construction costs remain a challenge across the industry. How is OKP managing cost pressures, and are there any pricing strategies being employed to protect margins?
OKP is cognisant of the rising cost pressures in the construction industry and remains vigilant in navigating the challenging market conditions. The group will continue to ensure effective cash flow management and remain prudent with its capital structure and finances.
Additionally, the group is committed to raising its productivity by integrating technology into its business processes to reduce reliance on manpower and upgrade its workforce.
Strong execution remains critical to ensuring projects are completed on time and within budget and refraining from incurring unnecessary additional costs.
8. Sustainability and ESG have increasingly been a key focus. How is your company committed towards sustainability?
To integrate sustainability into its business, the group invests in technology and innovation. This includes using solar panels at premises to reduce carbon emissions and using carbon mineralised concrete to reduce embodied carbon for its projects.
The group prioritises workers’ health and safety and general safety, and invests in and adopts cutting-edge technologies, innovative approaches, and strategic measures that pre-emptively address potential hazards and risks. For example, in order to cope with extreme weather conditions, its measures include prohibiting outdoor works during adverse weather conditions and providing cooling resources like water stations, misting systems and solar fans. These measures and advancements have cultivated a healthier, safer and more sustainable built environment, promoting the well-being of its workforce.
The group also pledges to enhance measures to safeguard the welfare of its workers, as it firmly believes that such investment will be beneficial in the long run, despite incurring additional cost.
9. How does OKP differentiate itself from competitors in both public and private sector tenders?
The group has become a well-known business in the transport infrastructure and civil engineering industry in Singapore and the region, differentiating itself in both public and private sector tenders through its decades-long track record, wide expertise, and a proven ability to navigate industry cycles.
Its strong reputation as a preferred civil engineering contractor gives the group a competitive edge in securing contracts across various industries. This is reflected in its robust FY2024 order book of $600.7 million, with projects extending till 2027, primarily driven by public sector projects.
The group remains committed to being a trusted partner for key public agencies, having successfully undertaken projects for HDB, JTC Corporation, Land Transport Authority, National Parks Board, PUB and Urban Redevelopment Authority. In the private sector, the group has worked for esteemed clients, including Changi Airport Group, ExxonMobil, Foster Wheeler Asia Pacific, and WorleyParsons.
As a steadfast business in transport infrastructure and civil engineering, the group meticulously complies with legislative and regulatory requirements to enhance workplace safety, environmental protection, and employee welfare. It implements strict safety management measures throughout all project stages, ensuring all staff, contractors, and subcontractors are skilled, well-equipped, and trained to work safely, with the guiding principle of providing a safe, accident-free working environment.
10. Looking ahead, what are OKP’s top three strategic priorities for the next five years, and how do they align with the company’s long-term vision?
- Technological innovation: The group is committed to investing in and adopting cutting-edge technologies and innovative work processes to enhance productivity, improve operational efficiency, and drive innovation across its operations.
- Sustainability: Embedded in every aspect of its business and operation, the group continues to adopt environmentally sustainable practices and play an active role in making its climate a more sustainable and greener one.
- Business diversification: To drive long-term growth, the group will continue to explore strategic partnerships to strengthen its foothold in property development and investment, with a strong focus on diversifying earnings and strengthening recurring income streams.
Together, these priorities position the group for sustainable growth while maintaining its competitive edge in the industry.
Emelia Tan is director of research and FinLit at SGX Group
