Higher taxes and costs took their toll on the second-half profit of offshore-to-renewables player Kim Heng.
The Singapore-listed company’s net profit shrank to just SGD 415,000 ($308,700) from SGD 4.5m in the second half of 2022.
The result brought profit for the full year to SGD 2.34m — a 73% year-on-year decline from SGD 8.6m.
While revenue for the six months to 31 December 2023 increased year on year by 29% to SGD 57.7m, costs rose by 33% to SGD 39.4m.
Marine offshore support services and chartering & towage were the largest contributors with revenue of SGD 22.75m and SGD 21.9m, respectively.
Vessel sales & newbuildings chipped in a further SGD 14.4m for the second half, which was up significantly from a year earlier, when the segment contributed only SGD 1.5m to revenues.
Singapore accounted for SGD 23.1m of Kim Heng’s revenue during the second half. Taiwan was the next biggest contributor (SGD 16.7m), reflecting the company’s growing investments in the offshore wind sector there, with revenue more than twice what it was a year earlier.
Tax expenses for the period more than doubled to SGD 3.5m, mainly due to the higher provision of deferred tax liabilities as well as the provision of current tax.
On a positive note, a pivot into the offshore renewables markets appears to be paying dividends.
Revenue from renewable energy, which is included in its offshore marine services segment, increased by SGD 7.9m from SGD 9.8m in 2022 to SGD 17.7m.
The company said it remains on track to extend its strategic footprint into the offshore renewables market, especially in Asia, and demands for vessels for chartering and horizontal directional drilling works are expected to remain strong.
“The group will, however, need to remain agile and respond to any shifts. given the geopolitical and economic uncertainties ahead,” it added.
Thomas Tan-led Kim Heng is listed on Singapore’s sponsor-supervised listing board Catalist, which is modelled on the London Stock Exchange’s Alternative Investment Market.
