Sanli Environmental Limited, one of Singapore’s leading environmental engineering companies, achieved a net profit after tax of S$1.6 million for the six months ended 30 September 2023 (“1H2024”), a 20.8% increase from S$1.3 million in 1H2023.
1H2024 revenue jumped 29.8% to S$50.7 million, while gross profit rose by 36.8% to S$7.2 million, mainly due to higher revenue and higher gross profit margin from both Engineering, Procurement and Construction (“EPC”) and Operations and Maintenance (“O&M”) business segments. Gross profit margin rose 0.7 percentage point to 14.2% in 1H2024 from 13.5% in 1H2023.
Revenue from the EPC segment rose 28.4% to S$40.9 million mainly due to the contribution from larger projects, and the O&M segment achieved a revenue increase of 36.1% to S$9.8 million as more O&M contracts were secured.
Profit attributable to shareholders rose 9.3% to S$1.6 million for 1H2024, with an earnings per share of 0.61 Singapore cents for 1H2024 (1H2023: 0.55 Singapore cents).
Sanli’s financial position remains resilient with a net asset value of S$30.7 million, which translates into a net asset value per share of 11.51 Singapore cents as at 30 September 2023, compared to 11.68 Singapore cents as at 31 March 2023.
Mr Sim Hock Heng, Chief Executive Officer of Sanli commented: “We are back on our steady growth track
with the normalisation of business activities back to pre-COVID-19 pandemic levels. We are also making
progress in our foray into the industrial sector, clinching a S$4.57 million contract. Furthermore, the
consolidation of our business units at our new Chin Bee headquarters will generate greater operating
synergies and cost savings, while addressing our foreign manpower housing needs. Our orderbook
currently stands at S$325 million and is expected to be completed by early 2027.”
Business Outlook
With the normalisation of business activities back to pre-COVID-19 pandemic levels, Sanli’s revenue recorded higher contributions from both EPC and O&M segments. Sanli will continue to bid for major municipal projects in Singapore that leverage its engineering expertise and strong track record, further expand into the manufacturing and industrial sectors, and also explore opportunities for partnerships, joint ventures or mergers and acquisitions to further boost growth.
Despite an uncertain macro-economic environment and inflationary pressures, Sanli’s management remains hopeful that current geopolitical tensions will improve and that the global economy will stabilise in the longer term, and have maintained their cautious optimism for FY2024.
1. Consolidation of Operations
Sanli’s recent acquisition of 22 Chin Bee Drive allows it to streamline its corporate office and workshops while providing a centralised accommodation solution for its foreign workforce. The Group will also consolidate its O&M workshop and magnesium hydroxide slurry manufacturing operations there, which will boost management oversight of all business units, increase operational efficiencies, lower operating costs, and reduce reliance on third-party dormitory facilities.
2. Diversification into Industrial Sector
Sanli’s wholly owned subsidiary Enviro Plant & Engineering Pte. Ltd. (“EPE”) is an environmental engineering solutions provider for water and wastewater treatment, air pollution control and solid waste management to the industrial plant sector in Singapore and Southeast Asia.
In 1H2024, EPE secured a S$4.57 million contract for designing, fabricating and installing an Air Scrubber Process Exhaust System for a semiconductor company in Singapore, to be completed by April 2024.
3. Diversification into Manufacturing Business
Sanli also manufactures and sells magnesium hydroxide slurry under its wholly-owned subsidiary Mag
Chemical Pte. Ltd. (“MagChem”) as part of the Group’s revenue diversification strategy by capitalising on opportunities in green technologies that can utilise its existing knowledge and expertise. MagChem is proactively engaging potential customers and growing its market presence by participating in exhibitions in Singapore and Southeast Asia.
4. Update on Sanli Myanmar
Sanli Myanmar is a 60% owned subsidiary of the Group, which provides Engineering, Construction and Water & Building Related Services in Myanmar. Although Sanli Myanmar’s operating environment has stabilised, the political situation in Myanmar continues to dampen its growth. For 1H2024, Sanli Myanmar contributed 2.5% of the Group’s revenue (1H2023: 1.5%).
Sanli’s share price as of 14 November 2023 after market close was S$0.107.
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About Sanli Environmental Limited
Listed in 2017 on the SGX-Catalist, Sanli Environmental Limited (“Sanli”) is an environmental engineering company in the field of water and waste management. Sanli’s expertise is in the design, supply, delivery, installation, commissioning, maintenance, repair and overhaul of mechanical and electrical equipment as well as process, instrumentation and control systems in wastewater treatment plants, water reclamation plants, NEWater plants, waterworks, service reservoirs, pumping stations and incineration plants.
The Company’s business is divided into three business segments.
- The Engineering, Procurement and Construction segment provides engineering, procurement and
construction services within the field of water and waste management including process
upgrading of existing water treatment plants, upgrading of pumping station capacities,
replacement of aged mechanical and electrical equipment, and design and build of various
treatment process systems. - The Operations and Maintenance segment provides corrective and preventive maintenance
services relating to water and waste management to ensure reliability and minimal disruptions to
its customers’ operations. - The Chemical segment manufactures and sells magnesium hydroxide slurry to customers in the
wastewater treatment and marine industries.
Backed by its strong engineering capabilities, Sanli has the ability to integrate mechanical, electrical and process engineering expertise to provide customised, cost- and time-efficient integrated engineering solutions and services to its customers.