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10 Things to Know About Nordic Group Ltd’s Latest Earnings

Nordic Group Ltd (SGX: MR7) is involved in providing automation system integration solutions, vessel maintenance, repair and overhaul (MRO), and precision engineering, among others.

Yesterday, the firm announced its financial results for the full-year ended 31 December 2017. Here are 10 things investors should know from the earnings announcement:

1. Revenue for the period grew 12% year-on-year to S$91.5 million primarily due to higher revenue contribution from the Maintenance Services business segment.

2. Additional revenue from the acquisition of Ensure Engineering Pte Ltd in April 2017 helped to increase revenue at the Maintenance Services business segment by 71% to S$36.7 million. Meanwhile, Project Services’ revenue slumped 12% to S$53.5 million on the back of lesser projects for the year due to a tough operating environment.

3. Gross profit margin expanded from 31.2% in 2016 to 33.3% in 2017.

4. Net profit attributable to shareholders improved 20% to S$15.3 million. Consequently, the diluted earnings per share increased from 3.2 Singapore cents in 2016 to 3.9 Singapore cents in 2017.

5. Net profit margin for the latest period went up 1.1 percentage points to 16.7%.

6. The balance sheet weakened during the year. As at 31 December 2017, Nordic had S$40.3 million in cash and cash equivalents, and S$47.2 million in total borrowings. This translates to a net debt position of S$6.9 million. In comparison, at the end of 2016, the firm had S$4.2 million in net cash.

7. In 2017, return on equity was 19.9%, up slightly from 19.1% a year ago.

8. Cash flow from operations was S$15 million and S$2.1 million was spent on capital expenditure for the year. Therefore, Nordic brought in around S$13 million in free cash flow in 2017, an improvement from the S$12 million raked in a year ago.

9. The company has proposed a final dividend of 0.873 Singapore cents per share for the fourth quarter. Including the interim dividend of 0.653 cents already paid out, the total dividend for 2017 would be 1.526 Singapore cents per share, up 20% year-on-year. The 2017 dividend gives a dividend payout ratio of 39.1%.

10. Nordic’s outstanding order book was S$106.8 million, as at 31 January 2018, and the orders are expected to be fulfilled within the next 36 months.

At the closing price of S$0.58 today, the company is selling at a trailing price-to-earnings ratio of around 15 and a trailing dividend yield of 2.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Nordic Group Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.