OKP

OKP released a weak set of 3Q13 results with net profit at $0.3m (-88%), despite revenue rising 8% to $30.7m. The higher revenue was due to recognition from the group's key construction projects as well as existing and newly-awarded maintenance contracts. The rise in revenue was however outweighed by higher cost of works arising mainly from increases in sub-contracting, labour and additional costs for certain sewage-related projects. As such, gross margins slumped to 6.5% versus 22.6% y/y. Going forward, the grp guides that current market conditions are challenging but believe its business remains resilient. Ytd the grp has secured about $70.4m worth of new projects and its current order book stands at ~$447.0m, stretching earnings visibility over the next 3 years.