CONSTRUCTION and engineering services provider Civmec posted a net profit of A$26.5 million for the H1 FY2025, marking a 16.9 per cent decline from A$31.9 million in the year-ago period.
The company said in a bourse filing on Thursday (Feb 13) that this was due to a lower gross margin and higher administrative expenses incurred during the first-half period, which ended Dec 31, 2024.
Earnings per share for the six-month period fell to A$0.0521, from A$0.0629. It declared an interim dividend of A$0.025 per share for the six-month period.
Revenue rose 2.2 per cent to A$502.9 million, from A$492.3 million over the same period, mainly due to the timing of revenue recognition on projects.
However, gross profit fell 7.5 per cent to A$55.8 million from A$60.3 million, with a gross margin of 11.1 per cent. This was the result of higher business costs, which came in at A$447.1 million, up 3.5 per cent from A$432.1 million.
Interest income earned from bank accounts declined, causing other income to tumble 26.5 per cent to A$1.5 million in H1 FY2025, from A$2 million in the corresponding period in the prior year.
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Administrative expenses increased 18.3 per cent to A$16.8 million, from A$14.2 million over the same period.
The company attributed the rise to company fees, consultant fees and stamp duty incurred for the change of domicile and changes to the way the group classifies support function costs.
Tendering activities across Civmec’s operations are at historically high levels, with current priced opportunities nearing A$12 billion, said the company in a statement.
It is actively collaborating with a diverse range of clients on approved expansion, sustaining, and maintenance projects, as well as providing budget estimates for projects currently under feasibility studies.
“Civmec has made significant strides in progressing the financial close-out of major projects during the half. This progress will positively impact the group’s cash generation and net cash position in the second half of FY2025,” it added.
However, Civmec has observed a shift in market conditions, which is driving delays in the timing of key project awards or causing project timings to be rescheduled.
These will result in lower activity levels for the group during the second half of FY2025, and such levels could possibly extend into the first half of FY2026.
“Despite these delays/rescheduling, the group notes that the pipeline of tendering activities remains strong, and forward indications remain positive for upcoming projects across the sectors.
“The group continues to focus on maintaining a strong pipeline of tendering activities and exploring new revenue streams to ensure sustained growth and profitability,” the company added.
Shares of Civmec fell 2.8 per cent or S$0.03 to close at S$1.05 on Thursday.
