Mun Siong Engineering Limited: Q3 2025 Financial Performance and Guidance

Summary of Key Financials

• Revenue Growth: The Group reported total revenue of \$16.7 million for Q3 2025, up 5.7% from Q3 2024. For the nine months ended 30 September 2025 (9M2025), revenue rose 4.8% year-on-year to \$48.4 million.
• Gross Profit Margin: The Q3 2025 gross profit margin rebounded to 2.1%, from a negative 6.0% in Q3 2024. However, for 9M2025, the margin remained slim at 1.4% (versus 1.5% in 9M2024).
• Operating Losses: Despite improvements, the Group continues to report losses. Net loss before tax narrowed significantly in Q3 2025 to \$1.1 million (from \$3.1 million in Q3 2024). For 9M2025, the cumulative net loss before tax was \$4.5 million, comparable to \$4.4 million last year.
• EBITDA: Negative EBITDA improved to -\$1.9 million for 9M2025, up from -\$2.2 million in 9M2024.
• Shareholders’ Funds and Net Tangible Assets: Shareholders’ funds declined to \$42.3 million as of 30 September 2025 (from \$46.6 million at 31 December 2024). Net tangible assets per share fell to 7.3 cents (from 8.0 cents).
• Liquidity: Bank and cash balances increased to \$11.8 million, but net working capital fell by \$2.3 million to \$11.4 million. Total borrowings dropped to \$3.5 million as at 30 September 2025.

Segmental Performance and Operational Highlights

Singapore Operations

• Revenue increased to \$13.7 million in Q3 2025 (+3.8% y-o-y), driven by higher work activities.
• Gross profit margin improved by 2.6% due to better productivity and efficiency.
• Despite net losses, Singapore narrowed its losses by 80% in 9M2025, reflecting successful operational adjustments.
• Operating environment remains challenging with subdued oil demand, tight labour availability, and elevated subcontracting costs. Key business partners have deferred projects to 2026, affecting immediate outlook.
• Plans to set up a training centre in Malaysia to offset rising skill competency training costs (estimated setup cost: \$100,000 to \$200,000).

Malaysia Operations

• Revenue surged 70% to \$1.7 million in Q3 2025, mainly from the execution of Scaffolding, Insulation, and Painting (“SIP”) works.
• Gross losses continue due to low labour deployment and ongoing PRefchem’s Creditors Reliability Test (CRT). CRT completed end-September 2025.
• Secured two new customers for small-dollar fabrication projects, providing future marketing and capability demonstration opportunities.

Taiwan Operations

• Revenue dropped sharply in Q3 2025 to \$0.1 million (-80% y-o-y) due to fewer projects.
• Gross loss recorded in Q3 2025; however, 9M2025 saw net profit due to project completions.
• With the Taiwan Branch’s suspension ending December 2025, joint project tenders are planned for 2026. Diversification into Electrical and Instrumentation services is being explored.

US Operations

• Revenue was stable at \$1.2 million in Q3 2025. Gross losses persist but improved due to absence of one-off expenses.
• US operations are executing a major Turnaround project (450,000 barrels/day), finishing by mid-November 2025. Additional shutdown projects and new partner pre-qualifications suggest potential future revenue, but execution timing is uncertain.

Balance Sheet and Cash Flow Highlights

• Net Working Capital: Declined by \$2.3 million, largely due to reduction in trade receivables (\$7.8 million decrease due to strong collections).
• Trade Receivables: \$7.6 million outstanding as at 30 September 2025, with 48.1% already collected by 27 October 2025. No impairment deemed necessary.
• Borrowings: Temporary Bridging Loans fully repaid; working capital loans reduced; IPT loans from Chairlady remain outstanding at \$1.8 million, maturing May 2026.
• Gross Debt Ratio: Reduced to 8.3% (from 16.0% at end-2024), reflecting improved leverage.

Guidance and Forward-Looking Statements

• The Group expects to report an operating loss for FY2025, with cumulative losses of \$4.5 million in the first nine months (FY2024 loss: \$6.2 million).
• Several variation orders under discussion with business partners may contribute positively if approved, but are not yet reflected in the results.
• Liquidity remains tight, but cash controls, project recovery efforts, and financial support from Chairlady Ms. Cheng Woei Fen are helping bridge temporary gaps.
• Management is focused on strengthening operational efficiency, improving cash conversion, and positioning the Group for sustainable future performance.

Potential Price-Sensitive Information for Shareholders

• Operational Losses and Declining Net Assets: Continued operating losses and declining net tangible assets per share may weigh on share price and investor sentiment.
• Liquidity Position: While cash balances have improved, working capital remains tight and borrowings (including IPT loans) are still material. Any issues with liquidity or further losses may be viewed negatively by the market.
• Deferred Projects and Margins: Deferral of major projects by key Singapore partners, and thin margins due to labour and cost pressures, limit near-term recovery prospects.
• Potential Upside: Approval of variation orders, successful completion of US Turnaround projects, and new customer wins in Malaysia and Taiwan could provide positive catalysts, but timing is uncertain.
• Chairlady Support: Ongoing financial support from the Chairlady is crucial for operations; any change to this arrangement could be material.
• Strategic Moves: Establishment of the Malaysia training centre, diversification in Taiwan, and expansion of US operations could position the Group for future growth if successfully executed.

Conclusion

Mun Siong Engineering Limited continues to face a challenging operating environment with ongoing losses, tight liquidity, and project delays. However, improvements in gross profit margins, strong receivable collections, and active operational adjustments provide some grounds for cautious optimism. The Group’s ability to secure new customers, diversify service offerings, and successfully execute pending projects will be critical to future performance. Shareholders should closely monitor developments regarding variation orders, liquidity management, and the support from major shareholders, as these factors could materially impact the share price and overall financial health of the Group.

Disclaimer

This article is provided for informational purposes only and does not constitute financial advice or a solicitation to buy or sell securities. The information is based on management accounts and guidance statements that have not been reviewed or audited by external auditors. Investors should consult their financial advisers before making any investment decisions. Past performance is not indicative of future results.

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