Nordic Group Limited: 1H2025 Financial Analysis

Nordic Group Limited, a Singapore-listed diversified engineering solutions provider, has released its condensed interim consolidated financial statements for the half-year ended 30 June 2025. This review highlights key financial metrics, trends, dividends, and significant events impacting the company’s performance and outlook.

Key Financial Metrics and YoY Comparison

Performance Trends

• Revenue Growth: Revenue rose 11% YoY, driven primarily by a significant 24% increase in Project Services segment sales, while Maintenance Services remained stable.
• Gross Profit: Gross profit increased by 9%, with gross margin steady at 23%, indicating stable pricing and cost management.
• Net Profit: Despite higher operating profits net of tax (+14%), net profit was slightly down (-3%) due to increased distribution costs, foreign exchange losses, and lower other income.
• EPS: Earnings per share remained unchanged at 2.1 cents, reflecting stable profitability relative to share count.
• Dividend Payout: The interim dividend per share decreased slightly to 0.8276 cents from 0.8526 cents last year, in line with the decline in net profit.
• Balance Sheet: Net asset value per share improved to 33.5 cents, up 3% from FY2024.

Cash Flow and Balance Sheet Review

• Operating Cash Flow: Net cash from operating activities improved significantly to \$14.8m (vs. \$6.2m in 1H2024), reflecting effective working capital management and strong collections.
• Investing Activities: Net cash used was minimal (\$0.1m), with moderate capital expenditure and asset disposals offset by interest received.
• Financing Activities: Outflows totaled \$25.7m, mainly due to repayment of loans and borrowings (\$20.1m), dividend payments (\$3.6m), and treasury share buybacks (\$0.2m).
• Leverage: Loans and borrowings dropped sharply to \$39.2m (from \$59.8m at year-end), improving the balance sheet and reducing finance costs.
• Liquidity: Cash and cash equivalents decreased to \$30.9m (from \$43.4m), reflecting repayments and dividend distributions.

Dividends

• Interim dividend declared for 1H2025 is 0.8276 cents per share, payable on 4 September 2025.
• Total interim dividend amounts to \$3.3m, compared to \$3.4m for 1H2024.
• Dividend policy remains stable, with ongoing payouts despite minor declines.

Exceptional Items and Expenses

• Distribution costs surged by 182%, attributed to increased sales activity.
• Administrative expenses declined by 8% due to lower staff costs.
• Foreign exchange losses of \$1.43m (vs. \$0.92m gain in 1H2024) impacted the bottom line, driven by USD/SGD volatility.
• Other income decreased 78% YoY, mainly due to lower government grants and inventory write-downs.
• No exceptional earnings, asset revaluations, or delays in recognition were reported.

Share Buybacks and Equity Changes

• Company repurchased 516,500 ordinary shares during 1H2025, held as treasury shares (0.37% of issued shares).
• No share placements, convertibles, or dilution events were disclosed.

Orderbook and Outlook

• Robust orderbook of S\$184.9m as of 30 June 2025, with S\$62.5m from Project Services and S\$122.4m from Maintenance Services, including S\$48.7m in new contracts.
• Deliveries expected mainly over the next 36 months, with possible rescheduling or cancellation risks.
• Positive long-term prospects in marine, offshore oil and gas, petrochemical, pharmaceutical, semiconductor, infrastructure, and security sectors.
• Management cites prudent cost and risk management, and continued M&A exploration as strategic priorities.
• Geopolitical tensions, inflation, and currency volatility remain short-term headwinds.

Significant Events and Corporate Actions

• No divestments, IPOs, fundraising, or asset sales were reported.
• No significant legal disputes, natural disasters, or policy/tax changes affecting operations.
• No related-party transactions or unusual fund flows; interested person transactions were below \$100,000.
• No changes in directors’ remuneration were disclosed.
• No subsequent events of material impact after the reporting period.

Chairman’s Statement and Tone

The Chairman’s statement reflects a positive long-term outlook, citing the company’s strong position in expanding industrial sectors and the Singapore marine and offshore industry’s growth cycle. Management remains cautious regarding near-term macroeconomic challenges but is confident in delivering sustainable value through operational discipline and strategic growth initiatives.

Conclusion: Financial Performance and Outlook

Nordic Group Limited delivered a solid performance in 1H2025, marked by strong revenue growth, stable gross margins, improved operating cash flow, and prudent balance sheet management. While net profit declined slightly due to increased distribution costs and foreign exchange losses, the underlying business remains robust, supported by a healthy orderbook and continued dividend payouts. The overall outlook is positive, with management actively navigating macroeconomic headwinds and executing on long-term growth opportunities within core industrial sectors.

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