Reclaims Global Limited 1H2026 Financial Results: Revenue Growth, Higher Costs, and Strategic Outlook

Reclaims Global Limited, a Singapore-listed, eco-friendly construction service provider specializing in recycling, excavation, logistics, and leasing, released its unaudited half-year results for the period ended 31 July 2025 (1H2026). This review summarizes key financial metrics, performance trends, dividends, and noteworthy corporate actions, providing insights for current and prospective investors.

Key Financial Metrics and Performance Overview

Segmental Revenue Breakdown

• Excavation Services: S\$16.37m (+22.3% YoY), remains the core revenue driver.
• Logistics and Leasing: S\$4.77m (+21.1% YoY), driven by stronger market demand.
• Recycling: S\$0.61m (-60.9% YoY), reflecting a significant drop in demand for recycling services.

Historical Performance Trends

While revenue grew by 14.9% year-over-year, net profit and EPS declined by 14.5%, primarily due to a substantial increase in employee benefits expense (+51.7%) and other expenses (+34.4%). Cost of materials, services, and consumables (+12.1%) rose in line with revenue. The company’s net asset value per share improved from 25.8 to 27.5 SGD cents, reflecting growing shareholder equity.

Dividends

• Interim Dividend (1H2026): 0.5 SGD cents/share, S\$655,000 total.
• Interim Dividend (1H2025): 1.0 SGD cent/share, S\$1,310,000 total.
• Final Dividend (FY2025, paid in 1H2026): 0.2 SGD cents/share, S\$262,000 total.

The interim dividend for 1H2026 is 50% lower than the same period last year, reflecting management’s more cautious approach amid rising costs and a slightly weaker profitability trend.

Balance Sheet and Cash Flow

• Cash and cash equivalents: Increased to S\$18.5m from S\$14.0m at end-January 2025.
• Non-current assets: Dropped by 45.7% due to reclassification of property and equipment to assets held for sale and ongoing depreciation.
• Current liabilities: Increased by 47.8%, mainly from higher trade and other payables.
• Operating cash flow: Strong at S\$5.2m, up from S\$1.0m in 1H2025.

Asset Sales and Corporate Actions

• A binding agreement was entered for the sale of an office building and leasehold land; assets worth S\$5.4m were reclassified as “held for sale” and the sale is expected to complete in the last quarter of FY2026.
• No new share issuance, buybacks, or fundraising activities in the period.

Related Party Transactions

• Transactions with New Development Construction (NDC), an interested party due to family ties with the Executive Chairman, included rendering logistics services (S\$211k), supply of construction materials (S\$94k), leasing of excavators (S\$13k), and receipt of demolition/excavation services (S\$71k). All IPTs were conducted under the shareholders’ mandate.

Exceptional Items and Noteworthy Expenses

• Employee benefits expense saw a notable jump to S\$4.4m (+51.7%), in line with increased business activity.
• Other expenses rose due to higher repair and maintenance costs.
• Depreciation expense remained stable (S\$1.0m).

Chairman’s Statement and Industry Outlook

“The construction sector grew by 4.9% and 6.0% year on year for the first and second quarter of 2025 respectively. The construction demand in terms of contracts awarded rose by 12.7% year on year in the second quarter, moderating the 74.3% year on year growth in the first quarter, according to the economic survey conducted by the Ministry of Trade and Industry Economic of Singapore. The Group notes that the Singapore Government continues to push for the development of affordable housing, transport, and renewable energy infrastructure. However, the Group is cognisant that the growth is against a backdrop of unprecedented global uncertainties as geopolitics take centre stage affecting almost all business decisions from investing, to financing, to capital allocation etc. The Group remains focused in its operations in Singapore while cautiously assessing any new or additional investments. The Company will stay vigilant and continue to adjust its business and strategies as the global economic situation evolves.”

The statement is cautiously optimistic, emphasizing sectoral growth but acknowledging significant macroeconomic and geopolitical uncertainties. The tone is moderate—neither overly positive nor negative—and signals prudent risk management and a focus on core markets.

Events and Risks

• Macroeconomic Risks: References to global uncertainties and geopolitical risks could affect business decisions and sector-wide demand.
• No major legal, tax, or policy changes, nor natural disasters, were reported for the period.

Conclusion and Recommendation

Overall Assessment: Reclaims Global delivered solid revenue growth, underpinned by strong demand in excavation and logistics. However, the sharp rise in costs, especially employee benefits and other expenses, has led to a decline in profitability and EPS compared to the previous year. The reduction in interim dividend and reclassification of assets for sale indicate a more cautious capital management approach amid increased macroeconomic risks.

If you are currently holding this stock: Investors may consider holding, but with caution. The company’s core operations remain robust, and cash flows are strong, but rising costs and declining profitability warrant vigilance. Monitor upcoming asset sales, costs, and any signs of margin recovery, as well as macroeconomic developments in the construction sector.

If you are not currently holding this stock: Consider waiting for clearer signs of margin stabilization or improvement before taking a position. The business is fundamentally sound, but the current cost pressures and lower dividends may limit near-term upside. Revisit the stock after the asset sale completes or if profitability shows signs of recovery.

Disclaimer: This article is based strictly on the company’s published financial results and does not constitute investment advice. Please conduct your own due diligence or consult a financial advisor before making investment decisions.

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