HY2026 Financial Results Review: Solid Recovery and Cautious Growth Ahead

The HY2026 results presentation reveals a company demonstrating signs of recovery and prudent financial management amid ongoing market volatility. Below, we provide a structured analysis of the key financials, recent performance, and management outlook, followed by actionable recommendations for investors.

Key Financial Metrics & Performance Comparison

Highlights:

• Revenue increased slightly by 1.0% YoY, driven by growth in the rendering of services and airtime segments, offset by lower sales of goods.
• Gross profit rose 3.7% YoY, with a modest improvement in gross profit margin (29.3% vs 28.5%).
• Net profit attributable to owners swung from a loss of S\$0.3 million in HY2025 to a profit of S\$0.1 million in HY2026, reflecting operational improvements and cost discipline.
• Other income jumped 182.5%, mainly from government grants, fair value gain on derivatives, and inventory allowance write-back.
• The group maintained a strong liquidity position, with cash and cash equivalents stable at S\$5.4 million and access to sufficient bank facilities.

Cash Flow Review

The group generated positive net cash from operating activities of S\$2.0 million (up from a negative S\$0.5 million in HY2025), driven by favorable working capital movements, such as increased contract liabilities and reduced receivables/inventories. Investing activities consumed S\$0.45 million, mainly for plant and equipment. Financing outflows totaled S\$1.47 million, mainly for debt repayment, lease liabilities, and dividend payments, partially offset by new borrowings.

Financial Position (As at 30 September 2025)

• Equity attributable to owners: S\$21.6 million (down from S\$22.2 million at 31 March 2025).
• Total liabilities: S\$12.5 million (lower than S\$13.4 million previously).
• Loans and borrowings: S\$0.76 million (down from S\$1.27 million).

Outlook & Strategy

Management has secured new project orders in the offshore energy and renewables sectors. The company aims to deliver these projects on time while exploring opportunities to diversify its revenue streams. However, it remains vigilant regarding risks and operational costs, given the volatile and uncertain market environment. The tone of the outlook is cautious but proactive, reflecting both optimism in new business wins and prudence in cost control and risk management.

Exceptional Items & Other Noteworthy Events

• No mention of asset revaluation, exceptional earnings/expenses, share buybacks, dilution, IPOs, fundraising, or legal disputes.
• No disclosure on proposed dividends or directors’ remuneration.
• No corporate actions, divestments, or related-party transactions highlighted.

Conclusion & Investment Recommendations

Overall, the company has delivered a modest but meaningful turnaround, returning to profitability and maintaining a robust cash position. The outlook is cautiously positive, underpinned by new project wins in promising sectors but tempered by acknowledged market uncertainties and cost vigilance.

Recommendations:

• If you currently hold this stock: Consider maintaining your position. The return to profitability, stable cash flows, and new order wins suggest a foundation for gradual recovery. However, continue to monitor for execution risks and macro environment shifts.
• If you do not currently hold this stock: It may be prudent to wait for clearer evidence of sustained profit growth or a more significant uptick in revenue, especially as the company continues to navigate a volatile market. New investors should look for the successful delivery of new projects and further margin improvements as entry signals.

Disclaimer: This analysis is based strictly on the information provided in the HY2026 results presentation. It does not constitute investment advice. Investors should consider their own financial situation and consult with a licensed advisor before making investment decisions.

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