OKP Holdings Limited posts net profit of S$3.5 million on revenue of S$33.9 million for the first quarter ended 31 March 2010

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1 No. 6 Tagore Drive #B1-06, Tagore Building Singapore Tel: (65) Fax: (65) OKP Holdings Limited posts net profit of S$3.5 million on revenue of S$33.9 million for the first quarter ended 31 March 2010 Our business activity level remains high and all the signals point towards a growth momentum that will continue at a good pace as the year unfolds, says Group Managing Director, Mr Or Toh Wat SINGAPORE, 10 May 2010 MAINBOARD-LISTED infrastructure and civil engineering company OKP Holdings Limited (OKP or the Group) today announced its financial results for first quarter ended 31 March The Group posted revenue of S$33.9 million and net profit after tax and minority interest of S$3.5 million. These results compare to revenue of S$29.6 million and net profit of S$3.2 million, in the same corresponding quarter a year ago, up 14.5% and 10.1% respectively. Earnings per share (basic) stood at 1.54 cents compared to 1.42 cents previously, an improvement of 8.5%. The construction segment continued to contribute the lion s share of overall revenue, recording revenue of S$27.4 million for the quarter, an increase of S$6.5 million or 31.1% from the S$20.9 million in the previous corresponding period. This was mainly attributed to a higher percentage of revenue recognised from a few construction Page 1 of 6

2 projects which were in full swing in the period under review. The maintenance segment registered revenue of S$6.5 million compared to S$8.7 million in the previous corresponding quarter. The difference was due primarily to the substantial completion of existing maintenance projects in the first quarter of 2010 and the absence of new maintenance contracts secured for the period. Corresponding to the increase in Group s revenue, gross profit increased by S$0.9 million from S$4.9 million previously to S$5.8 million for the three months ended 31 March Gross profit margin stayed fairly stable at 17.1% against 16.5% recorded in the previous corresponding quarter. Commenting on the quarter, Group Managing Director, Mr Or Toh Wat said: We are pleased with the overall financial and operating performance of our core businesses, which delivered positive revenue growth and stable profit margins. At the same time, we continued to exercise stringent cost discipline, which played a part in helping us to achieve a resilient earnings performance. The Group s activities continue unabated with numerous large public sector projects across the island including the Land Transport Authority s project to widen the Central Expressway from Pan Island Expressway to Braddell Interchange, the Urban Redevelopment Authority s contract for environmental improvement works at Siglap Village, Upper Serangoon Road and Kampong Sireh, and the National Parks Board s project to build three park connectors as well as the contract from Foster Wheeler Asia Pacific Pte Ltd and WorleyParsons Pte Ltd to carry out civil works on Jurong Island. To date, the Group has secured three public sector projects totalling approximately $39.5 million. The projects include construction and maintenance works at Tuas South Avenue 12 and Tuas South Avenue 14 worth $5.2 million from the Jurong Town Corporation, ad hoc repairs and upgrading of roads, road related facilities and road structures in Central Sector for a period of 39 months worth $19.4 million and ad hoc repairs and upgrading of roads, road related facilities and road structures in North- Page 2 of 6

3 West Sector for a period of 39 months worth $14.9 million from the Land Transport Authority. The above projects will be completed and delivered to clients progressively from now until The Group s order book stands at S$306.1 million based on secured contracts as at 10 May 2010, with some projects completing in OKP is a leading home-grown infrastructure and civil engineering company in the region specialising in the construction of urban and arterial roads, expressways, vehicular bridges, flyovers, airport infrastructure and oil & gas-related infrastructure for petrochemical plants and oil storage terminals. The Company is also engaged in maintenance works for roads and roads-related facilities as well as building construction-related works. Strong balance sheet The Group s assets totalled S$130.4 million and net tangible assets added up to S$63.1 million as at 31 March 2010 compared to S$122.4 million and S$57.2 million respectively as at 31 December This gives net tangible assets of 24.4 cents per share, up 5.2% compared to 23.1 cents per share as at 31 December The Group s net working capital was positive at S$50.8 million, up 13.9% compared to the previous corresponding period. The Company recorded a net cash position of S$83.1 million as at 31 March Its market capitalisation stood at S$122.7 million, based on the closing share price of S$0.465 as at 10 May Page 3 of 6

4 Positive outlook In line with the overall positive economic climate, Mr Or said he expects the outlook for the construction industry to remain healthy over the next 12 months. The Ministry of Trade and Industry (MTI) had announced last month that it expected the Singapore economy to grow by 7% to 9% in 2010, up from 4.5% to 6.5%. It had also released advance estimates that indicated that Singapore s Gross Domestic Product expanded by 13.1% on a year-on-year basis in the first quarter of The Building and Construction Authority s (BCA) latest statistics also estimated Singapore s construction demand for 2010 to be between S$21 billion and S$27 billion with the bulk of demand originating from the public sector. The sector is expected to contribute 65% of the total, between S$14.0 billion and S$17.9 billion and this will primarily be driven by higher growth in most categories of building construction demand and strong civil engineering projects led by Land Transport Authority s (LTA) MRT projects for Downtown Line Stage 3 and major road projects. Other forthcoming projects include the LNG Terminal, Fusionopolis 2A, industrial facilities at Seletar Aerospace Park, campus expansion of Institutes of Higher Learning (IHLs) and new healthcare facilities. For , public sector construction demand is projected to be between S$10 billion and S$14 billion, with 45% of it deriving from building projects while the rest from civil engineering projects. Mr Or said: Against this positive backdrop, we are confident that public sector civil works will continue to drive revenue growth, and we will carry on building core competencies to enhance our leadership position in this space. In addition, with our underlying business drivers remaining strong and with abundant market opportunities, we are well-positioned for sustained growth in this sector. Our business activity level remains high and all the signals point towards a growth momentum that will continue at a good pace as the year unfolds, Mr Or added. Page 4 of 6

5 Going forward Looking ahead, the Group will continue to leverage its track record and financial strength to participate in tenders for larger civil engineering projects in order to generate higher profitability as well as to raise its business profile in the construction industry. Apart from public sector works, it will also look to extend its civil engineering capabilities into the Oil & Gas sector. Should the opportunity arise, the Group is open to expanding its business through acquisitions, joint ventures or strategic alliances that can complement their current business and that can potentially provide access to new markets and prospective clients. -- Ends -- Page 5 of 6

6 About OKP Holdings Limited ( OKP Holdings Limited (OKP) is a leading home-grown infrastructure and civil engineering company in the region, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads, airport infrastructure and oil & gas related infrastructure for petrochemical plants and oil storage terminals. Established in 1966 by Founder and Chairman, Mr Or Kim Peow, OKP has two core business segments, Construction and Maintenance. The Group tenders for both public and private civil engineering and infrastructure construction projects. The Group s client base includes public sector agencies such as Civil Aviation Authority of Singapore, Housing & Development Board, JTC Corporation, Land Transport Authority, National Parks Board, Public Utilities Board and Urban Redevelopment Authority as well as private sector organisations like Foster Wheeler Asia Pacific Pte Ltd and WorleyParsons Pte Ltd and Far East Organisation. OKP had been listed on the Singapore Exchange Dealing and Automated Quotation System (SESDAQ), now renamed CATALIST, on 26 July Its listing was upgraded from the SGX Catalist to the SGX Mainboard with effect from 25 July Since 2006, the Group has forged a presence in the Oil & Gas sector. It has since completed a project relating to the S$750 million Universal Terminal, a massive petroleum storage facility on Jurong Island, Singapore s oil refining and petrochemical hub, and has gone on to secure a number of other projects, including civil works relating to ExxonMobil s multi-billion dollar petrochemical project, known as the Singapore Parallel Train Project. OKP has won a number of awards for its annual reports and its excellence in Investor Relations. At the Singapore Corporate Awards 2009, it bagged two awards Best Investor Relations Award (Gold) and Best Annual Report Award (Silver). At the Singapore Corporate Awards 2008, OKP was the Silver winner for Best Investor Relations Award. It also won the second runner-up position at the 30th Annual Report Awards in 2004 and Best Annual Report Award (Gold) at the Inaugural Singapore Corporate Awards in 2006 for excellent standards of corporate disclosure. On 17 February 2009, a Certificate of Achievement was awarded to OKP in recognition of the Company s achievement in entering the 22nd Singapore 1000 & SME 500 rankings. The certificate was awarded by DP Information Group, the Publisher and Ranking Body, and its partners comprising Ernst & Young, SPRING Singapore, IE Singapore and The Business Times. Wholly-owned subsidiary, Eng Lam Contractors Co (Pte) Ltd, was upgraded to an A2 grade civil engineering contractor under the BCA Contractors Registry System in August 2009 allowing it to tender for public sector construction projects with contract values of up to S$85 million each. In 2008, another subsidiary, Or Kim Peow Contractors (Pte) Ltd was upgraded to an A1 grade civil engineering contractor, which allows it to tender for public sector construction projects of unlimited value Issued on behalf of OKP Holdings Limited by: Waterbrooks Consultants Pte Ltd Media and Analysts Contact: Ms Judy Kan Tel: (+65) Mobile: (+65) judy.kan@waterbrooks.com.sg Mr Wayne Koo Tel: (+65) Mobile: (+65) wayne.koo@waterbrooks.com.sg Page 6 of 6

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