BRC Asia - DBS Research 2023-05-16: Anticipating Better Times Ahead

• BRC Asia (SGX:BEC)'s 1H23 revenue declined 10% y-o-y to S$717.1m, amounted to ~40% of ours and consensus full year estimates, which is below our expectations despite anticipating a weaker 1H23.
  • The lower revenues were due to slower site progress which we believe is largely attributed to the heightened safety period imposed on the construction industry.
  • - Read this at SGinvestors.io -
• Notably, construction output continued to grow y-o-y, contrary to BRC Asia’s drop in volumes and we understand that this could be due to some tail-end construction activities that were less impacted by the heightened safety period.
• Gross margins declined by 1.3 percentage points to 7.4% due to a lower mix of value-added steel products. Gross profit decreased 23% y-o-y, partially mitigated by reversal of provisions of onerous contracts at S$7.9m in 1H23 vs S$1.8m in 1H22 which is expected to continue into 2H23. As a result, net margins fell 1.3 percentage points to 3.7%, and BRC Asia's 1H23 earnings fell 34% y-o-y, below ours and consensus estimates.
• - Read this at SGinvestors.io -
• BRC Asia's order book stood at S$1.42b as at 2Q23 vs $1.40b as at 1Q23.

Our Thoughts on BRC Asia

Anticipating better times ahead.

• Read more at SGinvestors.io.

Above is an excerpt from a report by DBS Group Research.
Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.

Previous report by DBS:
2022-12-02 BRC Asia - Heightened Safety Period A Short Term Blip; Expect A Stronger 2H23.

Price targets by other brokers at BRC Asia Target Prices.

Listing of research reports at BRC Asia Analyst Reports.

Relevant links:
BRC Asia Share Price History,
BRC Asia Announcements,
BRC Asia Dividend Payout Dates & Corporate Actions,
BRC Asia News