Koon Holdings

Koon Holdings Limited slipped into red for 1H13 with a net loss of $10.1m from a net profit of $0.5m in the previous year, despite a 41.1% increase in revenue to $126.4m. Revenue growth in 1H13 was largely driven by the Construction division. A few key projects including construction of container berths and yards at PSA’s Pasir Panjang Terminal 2 and construction of Seawater Intake Facilities contributed to the increase in revenue from this division. However, the group’s performance was marred by construction project delays and relocation of its precast facility. Gross profit decreased by 79.5% to $2m in 1H13 mainly due to losses from its Construction and Precast divisions. On the outlook, the group aims to reduce production costs from the contribution of its precast yard in Batam, Indonesia, through a recently-established JV. Overall, amidst the sustained demand, the industry will continue to face margin pressure from the tight labor supply and volatility in material costs. Koon's construction and precast division had an outstanding order book of approximately $87.7m and $87.9m respectively.