NSL Ltd Financial Results Review: 18-Month Period Ended 30 June 2025

NSL Ltd, a Singapore-listed diversified industrial group, has released its condensed financial statements for the 6-month and 18-month periods ended 30 June 2025. The results demonstrate a strong rebound in profitability and revenue growth, largely driven by the robust performance of the Precast division, coupled with improved profitability following strategic divestments and reduced impairment losses.

Key Financial Metrics & Performance Summary

Historical Performance Trends

• Revenue: For the 18-month period ended 30 June 2025, Group turnover rose by 56% to S\$465.9 million from S\$298.1 million for the 12 months ended 31 December 2023, driven by strong Precast division sales, particularly in Malaysia and Dubai.
• Net Profit: Net profit attributable to equity holders swung to S\$37.2 million from a loss of S\$18.7 million in the previous period. The recovery is mainly due to better operational performance and fewer impairment losses.
• EPS: Similarly, EPS turned positive at 9.96 cents (18-month period) versus a loss of 5.01 cents previously.
• Operating Cash Flow: Operating cash flow was strong at S\$67.0 million for the 18-month period, up from S\$38.3 million in the prior 12 months, reflecting improved profitability and working capital management.
• Net Asset Value: NAV per share improved to S\$0.79 as at 30 June 2025, from S\$0.73 as at 31 December 2023.

Dividends

For FY2025, the Board declared an interim cash dividend of 3.0 cents per share (paid 11 June 2025) and recommended a final cash dividend of 1.5 cents per share (pending AGM approval). This is a significant reduction compared to the previous year’s interim (40 cents) and final (2 cents) dividends. The lower dividend payout aligns with a more normalized earnings base, as the prior period included a special dividend following a major divestment.

Segmental Performance

• Precast & PBU: Turnover soared by 68% YoY in 1H-2025, mainly due to higher deliveries for major projects in Malaysia. Profit before tax rebounded from a loss of S\$2.1 million to a profit of S\$11.5 million, on improved margins and scale.
• Environmental Services: Revenue dropped 35% YoY in 1H-2025 due to a loss of a key customer and a slowdown in certain business lines. This division swung to a loss before tax of S\$2.9 million from a profit of S\$7.3 million YoY.
• Chemicals: Stable but small contributor; profit before tax was S\$0.4 million in 1H-2025.
• Others: The “Others” segment reported a sharp turnaround, mainly due to a S\$5.4 million gain from the divestment of Tropical Resort Limited and Donvale Limited.

Exceptional Items & Non-Recurring Events

• Impairment Losses: S\$8.0 million goodwill impairment was recognized for the PBU division in Finland, due to continued losses and a weak housing market. In the previous period, a much larger S\$35.6 million impairment was recorded, including a full write-down of investment in Salzgitter Maschinenbau AG (SMAG).
• Divestments: Gains from the sale of Tropical Resort Limited and Donvale Limited (S\$5.4 million) provided a one-off boost to earnings. The group also completed the disposal of PT Eastech Indonesia.

Cash Flow and Financial Position

• Cash and Equivalents: As at 30 June 2025, the Group’s cash and cash equivalents including pledged deposits stood at S\$150.4 million, reflecting healthy liquidity.
• Borrowings: Borrowings have decreased significantly, mainly due to full repayment in the Environmental Services division and supplier invoice financing in Malaysia.

Forecast, Outlook & Management Commentary

“The performance of the precast business is likely to remain satisfactory underpinned by order books in Singapore, Malaysia and Dubai barring unforeseen project delays. The recently announced U.S. tariffs are expected to have no material impact on our business, as the Company does not currently have any sales or direct exposure to the U.S. market. The performance of the PBU business in Finland continues to face the challenging conditions of the housing industry in Finland. The Environmental Services division will continue to focus its efforts to ramp up capacity utilisation to improve performance of its industrial wastewater business.”

Tone: Cautiously Positive – Management expresses confidence in the core Precast business, highlights no U.S. exposure to tariffs, but notes ongoing challenges in the Finnish PBU and Environmental Services segments.

Events and Risks

• No significant legal disputes, natural disasters, or tax/policy changes affecting the business were reported.
• Related-party transactions and family involvement in management are clearly disclosed.
• No major share buybacks, placements, or mandates are indicated.

Conclusion & Investment Recommendations

Overall Assessment:

• Strengths: NSL Ltd has delivered a strong turnaround, with revenue growth, a return to profitability, positive operating cash flow, and reduced leverage. The Group’s Precast division is performing exceptionally well, and recent divestments have strengthened the balance sheet.
• Weaknesses/Risks: The Environmental Services and Finnish PBU segments remain under pressure, with revenue declines and impairment losses. Dividend yield has normalized after a one-off special payout last year. Some earnings were boosted by non-recurring divestment gains.
• Outlook: The outlook is cautiously optimistic for core operations, but with some uncertainties in less robust segments and macroeconomic risks.

Investor Recommendations

• If You Currently Hold NSL Ltd:
  Consider holding the stock, as the company’s turnaround is evident, core operations are profitable, and liquidity is strong. Monitor the performance of the Environmental Services and PBU divisions for improvement. The reduction in dividend may disappoint income-focused investors, but the payout is now more sustainable.
• If You Do Not Hold NSL Ltd:
  The stock may be of interest for investors seeking exposure to infrastructure and construction activity in Singapore, Malaysia, and Dubai. However, consider entering on pullbacks, as some of the recent profit growth was driven by non-recurring items, and recovery in all business segments is not yet broad-based. Cautious accumulation may be warranted, with close attention paid to upcoming quarterly results and management’s execution on underperforming businesses.

Disclaimer: This analysis is based strictly on NSL Ltd’s published financial report for the period ended 30 June 2025. It does not constitute investment advice. Please conduct your own due diligence and consult a licensed financial advisor before making investment decisions.

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