CSC Holdings Limited Financial Analysis: Net Profit Growth of \$6.2M

Business Description

CSC Holdings Limited is a Singapore-based company primarily involved in piling works, civil engineering works, trading and leasing of heavy foundation equipment, soil investigation, and surveying works. The group operates mainly in Singapore with additional activities in Malaysia, India, Thailand, Philippines, and Vietnam [[12]].

Industry Position and Competitors

CSC Holdings Limited operates within the construction and engineering industry. It faces competition from other construction firms and equipment leasing companies. The company’s established track record and comprehensive service offerings provide competitive advantages in the market.

Revenue Streams and Customer Base

The company’s revenue primarily comes from construction contracts and the trading and rental of heavy equipment. For the six months ended 30 September 2024, the revenue from contracts with customers was \$148.2 million, and rental income was \$6.3 million [[13]]. The customer base includes large infrastructure and civil engineering clients.

Financial Statement Analysis

Income Statement

For the six months ended 30 September 2024, CSC Holdings Limited reported a revenue increase of 5.5% to \$154.5 million compared to \$146.4 million in the same period of the previous year [[27]]. The net profit for the period was \$2.5 million, a significant turnaround from a net loss of \$3.7 million in the previous period [[4]].

Balance Sheet

As of 30 September 2024, the company’s total assets stood at \$387.4 million, with current assets of \$217.9 million and non-current assets of \$169.5 million. The total equity attributable to owners of the company was \$81.5 million [[5]]. The company’s current liabilities exceeded its current assets by \$6.1 million, reflecting a current ratio of 0.97 [[31]].

Cash Flow Statement

Net cash inflow from operating activities was \$5.3 million, a decrease from \$6.7 million in the previous year. Net cash outflow from investing activities was \$0.8 million, primarily due to lower capital expenditure. Net cash outflow from financing activities was \$9.6 million, attributed to higher net repayment of bank borrowings [[33]].

Dividend and Earnings

No interim dividends were paid for the six months ended 30 September 2024 [[21]]. Earnings per share improved to 0.06 cents compared to a loss per share of 0.08 cents in the previous period [[18]].

Key Findings

Strengths:

• Revenue growth of 5.5% year-on-year [[27]].
• Turnaround to a net profit of \$2.5 million from a net loss [[4]].
• Strong order book of \$310 million as of 31 October 2024 [[34]].

Risks:

• Current liabilities exceed current assets by \$6.1 million [[31]].
• Exposure to foreign currency risks due to operations in multiple countries [[30]].
• No dividend declared, indicating a focus on cash preservation [[35]].

Special Activities

The company is actively tendering for new projects and managing costs to improve profitability. It has also entered into a joint venture to enhance its market presence [[26]].

Investment Recommendations

If Currently Holding Stock

Investors holding CSC Holdings Limited stock should consider holding their position given the company’s return to profitability, revenue growth, and strong order book. However, they should closely monitor the company’s liquidity position and ability to manage current liabilities.

If Not Currently Holding Stock

New investors may consider a cautious approach due to the company’s current liability position. However, the company’s improving financial performance and strategic initiatives provide a compelling case for potential investment, especially if liquidity issues are resolved.

Disclaimer

This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consider their financial situation before making any investment decisions.

Report Date: 11 November 2024, Financial Year: FY2025