Nordic Group Limited 1H2025 Financial Results: Analysis and Investor Outlook

Nordic Group Limited reported its 1H2025 financial results on August 21, 2025, highlighting resilient revenue growth, consistent order book replenishment, and active capital management. The following analysis focuses on key financial metrics, business trends, and actionable takeaways for investors, based solely on the company’s reported figures.

Key Financial Metrics and Performance Table

* 2H2024 and some data not disclosed or not directly comparable in the report.

Historical Performance and Trends

• Revenue: 1H2025 revenue grew 11% YoY, driven by a 24% increase in Project Services revenue, though this segment typically has lower margins than Maintenance Services.
• Gross Profit Margin: Margin remained stable at 23%, with a slight dip attributed to the higher mix from lower-margin Project Services.
• Net Profit: Net profit declined 3% YoY, mainly due to higher foreign exchange losses from USD weakening against SGD. Excluding FX and financing items, core operating profit actually grew 14% YoY, underscoring operational strength.
• Order Book: The order book stood at S\$184.9m as of June 30, 2025, reflecting continued success in contract wins and replenishment despite a slight dip from 2024’s peak.
• Balance Sheet: NAV per share increased 3% to 33.5 cents, and net gearing was kept low at 6% after significant debt repayment, signaling prudent financial management.
• Dividend Track Record: Nordic has consistently paid dividends, maintaining a payout ratio of 40% or higher in recent years, with interim and annual dividends regularly distributed.

Segmental and Industry Diversification

• Service Lines: The company’s revenue is well-diversified across system integration, scaffolding, insulation, precision engineering, petrochemical/environmental, cleanroom, air & water engineering, and structural engineering. Recent acquisitions have reduced industry-specific risks and broadened the revenue base.
• Industry Exposure: Revenue is spread across onshore/downstream, marine/upstream, electronics manufacturing, infrastructure, pharmaceutical, semiconductor, and law enforcement/security, further insulating the group from cyclical downturns in any one sector.

Shareholder and Capital Management

• Insider Ownership: As of June 2025, directors and key executives collectively own over 75% of the company, signaling strong alignment with shareholder interests.
• Share Buyback: The company resumed buybacks in 2025, reaching 1,733,100 shares acquired, amounting to 0.43% of issued shares, at an average price of S\$0.3489 per share.

Exceptional Items and Risk Factors

• Foreign Exchange Losses: Higher FX losses impacted 1H2025 net profit, a risk primarily related to USD/SGD movements.
• No Asset Revaluations, Legal Disputes, or Major Fundraising: The report does not disclose any asset revaluations, legal proceedings, divestments, or fundraising activities in the period.
• Consistent Dividends: The company’s historical dividend record remains strong, though no explicit interim dividend figure is stated for 1H2025.

Outlook and Strategic Positioning

• Order Book and Revenue Visibility: Nordic continues to replenish its order book with S\$48.7m in new contracts in July 2025, supporting future earnings visibility.
• Balance Sheet Strength: With low gearing and rising NAV, the company remains well-positioned for further expansion or acquisitions.
• Diversification: Ongoing diversification across industries and services, aided by a series of strategic acquisitions, reduces risk and supports stable revenue growth.

Conclusion and Investment Recommendations

Financial Performance and Outlook: Nordic Group’s 1H2025 results highlight a business that is growing its top line, maintaining margins despite segment mix changes, and delivering consistent shareholder returns. While FX losses affected net profit, underlying operating profit is robust. The company’s solid balance sheet, strong insider alignment, and active order book replenishment underpin a positive outlook.

Investor Recommendations

• If you are currently holding Nordic Group shares: The company’s fundamentals remain sound, with steady revenue growth, low net gearing, and a strong history of dividend payments. The diversified business model and management’s alignment with shareholders suggest it is prudent to continue holding, especially for those seeking steady income and moderate growth. However, monitor FX risks and order book trends closely.
• If you are not currently holding Nordic Group shares: The current valuation may present an attractive entry point for investors seeking exposure to a diversified engineering and maintenance group with a proven dividend track record, conservative capital structure, and visible growth prospects. Consider accumulating on pullbacks, but be mindful of macroeconomic and FX volatility risks in the near term.

Disclaimer: This analysis is based solely on the information provided in Nordic Group Limited’s 1H2025 results presentation. It does not constitute investment advice. Please perform your own due diligence or consult a licensed financial advisor before making investment decisions.

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