Tuesday, July 29, 2008

BT: Network Man, Ricky Wong


Very inspiring article about how a man can grow from small to big in his career.




Business Times - 26 Jul 2008

Network man

Ricky Wong, chairman of Hong Kong-based City Telecom, tells AMIT ROY CHOUDHURY that Singapore's planned broadband network is all about attracting talent RICKY Wong's idea of future-proof technology is simple. It should be something his grandchildren will be able to use when they grow up.

As 46-year-old Mr Wong, co-founder and chairman of Hong Kong-based City Telecom (HK) Ltd (CTI), has two young children, it's obvious he is talking in terms of a couple of decades at least.
And he thinks the super-fast broadband network he has put up in Hong Kong, which connects 1.5 million homes in that city, is future-proof infrastructure his grandchildren will enjoy and find useful.


You need to remember how fast things move nowadays to understand the significance of Mr Wong's belief. Yesterday's cutting edge is today's obsolete technology.


Sub-megabit per second (mbps) connection speeds provided by dial up modems were state-of-the-art only a few years ago. Now a 100 mbps broadband connection, the highest Singapore has today, is already considered previous generation.

Cisco has called the Hong Kong cyber highway the world's biggest Metro Ethernet network. It can provide connection speeds of one gigabyte per second (gbps) and beyond.

The Hong Kong cyber highway was set up by Hong Kong Broadband Network, (HKBN), a wholly-owned subsidiary of CTI.

Mr Wong has now teamed up with local telcos StarHub and MobileOne in the Infinity Consortium to build Singapore's very own cyber highway - the Next Generation Broadband network, called Next Gen NBN or NBN for short.

Infinity is one of two bidders for the network. The other is the OpenNet consortium, led by Canada's Axia NetMedia and comprising Singapore Telecom, Singapore Press Holdings and SP Telecommunications.

One of these two consortiums will build the network and run it as the Network Operator - or NetCo.

Mr Wong comes across as a sincere man with a clear vision of what he wants to achieve and what the hurdles are.

He candidly admits that in this project there are plenty of wild cards. 'The oil price, interest rates, material costs, the regulatory environment and whether the current telecom incumbents will use our network - there are many unknowns,' he says.

As well as this: there is a fundamental difference between the Hong Kong example and what Singapore is embarking on. And that is the basic model being adopted.

In Hong Kong, HKBN is a vertically integrated service provider, meaning it owns the dark fibre and uses the bandwidth it provides to offer all manner of services.

Singapore has adopted a radically different model - an open access, no conflict model with the infrastructure owner not playing in the retail space, to ensure that it does not enjoy the competitive advantage by owning the network.

On top of the NetCo layer - for which the Infinity Consortium is bidding - there will be an Operating Company or OpCo, for which a separate bidding process will be held.

CTI is a pre-qualified bidder for this process, if it chooses to bid, when the bidding process is started by the government.

The OpCo will lease the bandwidth from the NetCo, then sell it to various companies which will use that bandwidth to offer all manner of retail services, from plain vanilla Internet connections all the way up to IPTV (Internet Protocol TV) and VoIP (Voice over Internet Protocol).

So, considering all the uncertainty, why is Mr Wong here? As he says himself, this job is not going to make him a billionaire. And anyway, he already has tonnes of money.

'I'm financially secure and I can retire because I'm the majority shareholder of CTI. But I still work hard because I enjoy what I do,' he says. Mr Wong has a dream - and that's what drives him. He wants to ensure that in five years there is fibre to most homes in Singapore and Hong Kong.

'Then these two cities will become a model for the rest of the world. The Americans and Europeans will come here to learn and follow us. We will become the technology leaders.'

And he adds an important point - maybe the big idea behind the building of the NBN. 'What is important is not how much bandwidth is used after the fibre is laid. Rather, what's important is that the bandwidth acts as a magnet to attract more talent. Attracting tech-savvy talent to Singapore is the real purpose of the NBN. If that is achieved, the NBN can be considered a success.'

Mr Wong reckons tech-savvy people worldwide will then see that Singapore is the best place to live, work and play - better than Silicon Valley, because it will have the best infrastructure.

Apart from this vision, Mr Wong loves a challenge, which is another factor behind his commitment to spend - as he says - half of the rest of his working life in Singapore if his consortium wins the contract.

To understand this urge to take risks and do something different, it's useful to know how Mr Wong's past experiences have made him a streetsmart - and contrarian - businessman.
'My first business was back in 1979 when I was 17 and had just finished my public examination at secondary school,' he says. 'I organised a summer school, got 400 students and made around HK$40,000,' he adds with a wry smile.

A few years later, when he entered Chinese University of Hong Kong to study electronics, he traded in textbooks. 'I used to bring in textbooks from Taiwan, where they were about 70-80 per cent cheaper than in Hong Kong, and sell them to fellow students. 'That helped make me self-sufficient while at university.'

After obtaining a Bachelor of Science degree in electronics in 1985, Mr Wong joined IBM in Hong Kong and worked for four years. After that, he migrated to Canada where he set up CTI in 1991. A year later he returned to Hong Kong to set up CTI there to provide competitively-priced IDD (international direct dial) services.

'In 1992 we did what was known as a call-back service - an alternative IDD service,' he said 'We did that until 1999 when we started to do simple re-selling of IDD.'

In 2000, CTI got a fixed-network licence in Hong Kong. 'We could do both international calls and infrastructure within the city of Hong Kong,' he says.

In the same year, CTI started a broadband venture. At the time, the idea that broadband could be a viable business was yet to sink in. But he went ahead. 'I wanted to take risks,' he recalls. 'I liked the challenge. I wanted to change the world. Everyone, including my parents, poured cold water on my plans, saying, 'Ricky, you know what you are doing? You are fighting with Hong Kong Telecom. They are huge, so what makes you so confident? Why are you wasting your time'?'

But Mr Wong politely told his parents: 'I know I can do it.'

His confidence came from the fact that CTI did it in IDD, so much so that at the peak, its market share was only 2 per cent lower than that of Hong Kong Telecom, now owned by PCCW.

Mr Wong recalls that in 2000 CTI was the last player to enter the local fixed-line market, unlike with IDD, in which it was the first to enter the re-selling market.

'The local fixed market deregulation started in 1995-96.' he says. 'And before we entered the market in 2000, three additional licences were issued - to Hutchison, Wharf and New World.'
As a result, CTI found itself up against a formidable foursome of blue chip companies - PCCW, Hutchison Telecom, New World Telecom and Wharf T&T.

At the time, broadband was very expensive in Hong Kong. It was a luxury product that cost from HK$300 to HK$400, Mr Wong recalls.

He, however, noted something that seemed significant, Although all of his major competitors were blue chip companies rolling in money, only one of them, PCCW, had its own network. The others leased network space from PCCW and other parties.

'So I said to myself, what's the difference in terms of service? Same chef, different waiter. Where is the choice (for consumers)?' says Mr Wong.

CTI decided to build a new network so it did not have to depend on the old networks to provide services.

But it was tough going. 'We didn't want to take the easy way out, so we built everything from scratch, because even if there is one inch of old cable in a network, that will become a traffic bottleneck,' says Mr Wong.

CTI faced many difficulties, as building owners were reluctant to let company engineers in to do construction work.

'I personally went to hold meetings with house owners,' Mr Wong says. 'They were mostly housewives and professionals who were not experts in telecommunications.'

He recalls talking until midnight, explaining to them the benefits of having high-speed connections to their homes. 'I used simple language to explain,' he says

Mr Wong feels that apart from being able to convince home owners, he was able to demonstrate to his staff that they had to be patient.

He notes that today, the incumbent player in Hong Kong provides around 8 mbps downlink and about one mbps uplink, while CTI's standard product is 100 mbps uplink and downlink. 'It's totally two generations up front and is not comparable.'

The CTI network is what is called a Category 5 network - the best there is on the market. Telephone lines are uncategorised or Category 0. Category 5, or Cat 5, as it is known, is the highest quality - the same as computer cabling.

'The difference between Cat 5 and a telephone line is the capacity we can put on,' says Mr Wong. 'With Cat 5 we can do 10, 100 and even 1,000 mbps (1 gbps).'

In Hong Kong, CTI offers two customer solutions. They can either use Cat 5, that is a high quality copper wire, or opt for an optical fibre line. The capacity limit of a Cat 5 copper wire is 1 gbps. With optical fibre, capacity is theoretically infinite.

'It's a future-proof technology,' says Mr Wong. 'We haven't come up with any alternative that is faster than fibre. It will be relevant for the next 20 years.'

And so what about the Singapore project?

Mr Wong feels very confident because there are, according to him, a lot of similarities between Hong Kong and Singapore. 'I think most of the households in the two cities already have a telephone line and a coaxial line for cable TV. The optical fibre will be an additional piece of infrastructure,' he says.

He, however, agrees that Singapore's open access model is radically different from his vertically integrated model in Hong Kong, but feels it's the only model that can succeed in Singapore.
'In Hong Kong we are all self-funded. We have no government support,' he says. 'But in Singapore, whoever builds the network will need government funding.'

While there are many similarities between the two cities, there is also a key difference, he says. And that is household density. In Hong Kong there are, on average, about 300 households per residential building, whereas in Singapore the number is about 80. 'So the construction cost is very different and that makes the whole business mode different.'

Mr Wong says he spent about HK$2.8 billion to connect 1.5 million homes. 'In Singapore it will definitely cost multiples of that amount to build a same-size network.'

As result, he adds, the Singapore NBN cannot be set up purely on a commercial basis, because the risk and return will not satisfy prudent investment criteria.

Singapore is not alone. Around the world, especially in European countries, the situation is the same, as it is in many other Asian countries, Mr Wong adds.

So if there has to be government support, it is only fair that the model should be open access with no conflict. 'It should be very low-risk, low-return kind of model, like say a water supply company.'

He reckons that for the system to work satisfactorily, the NetCo and OpCo should just provide the infrastructure. 'The competition should be at the retail level - the supply of different quality and type of services, like VoIP, karaoke, monitoring of the elderly etc. This is the right model to usher in a new network in Singapore.'

Mr Wong believes his company has one great advantage in the race to build the NBN - its experience in building in dense areas, using existing infrastructure and causing minimum disruption.

'While forming the (Infinity) consortium, I got a very good understanding of what is happening in Singapore,' he says. 'I even went down into one of the drains one rainy day to see how we can use them to build out the network. I saw we can utilise a lot of existing non-telecom infrastructure, like drains and bridges, to roll out the network, just as we did in Hong Kong. Our experience will come in handy.'

So the savvy Hong Kong businessman waits for the government to announce the winner of the bid to build Singapore's own cyber highway. And if the Infinity Consortium wins, Mr Wong is confident he will help build something his grandchildren's generation in Singapore will thank him for.

Thursday, July 3, 2008

BT: Mass market stays buoyant as buyers find price is right

Business Times - 02 Jul 2008


Mass market stays buoyant as buyers find price is right

Flash estimates for Q2 show overall private home prices flattening; steady HDB resales keep mass market more active

By ARTHUR SIM

(SINGAPORE) Flash estimates for property price indices are in with numbers suggesting that price-sensitive buyers are bargain hunting or scaling down their expectations altogether.

The Urban Redevelopment Authority (URA) released estimates for the Q2 2008 price index for private residential property yesterday with prices rising just 0.4 per cent - a mere crawl compared to the 3.7 per cent increase in the previous quarter.

While this represents the slowest growth in four years, Jones Lang LaSalle's local director and head of research (South East Asia) Chua Yang Liang also notes that it is the, 'steepest' quarterly rate of change since Q3 2000.

Much of the activity was in the mid and mass-market as reflected by URA's index for three geographical regions. Prices of non-landed private residential properties increased by just 0.2 per cent in Core Central Region (CCR) and 0.7 per cent in Rest of Central Region (RCR), but climbed a more robust 1.3 per cent in Outside Central Region (OCR).

Dr Chua added that demand remained favourable in the OCR supported by average nominal wage increases in the Q1 2008 and 'dislodged residents of collective sale sites'.

Also robust was the Housing and Development Board's (HDB) resale market with estimates for the quarter revealing that the HDB Resale Price Index increased by 4.4 per cent over the previous quarter, and higher than the 3.7 per cent increase in Q1 2008.

Knight Frank director (research and consultancy) Nicholas Mak said that the mass market is 'influenced' by HDB's resale market and added that, 'the resale market has been steady'.

Indeed, while HDB resale volume did fall to 6,360 units in Q1 2008, a 6 per cent drop compared to Q4 2007, it actually increased by one per cent on a year-on-year (y-o-y) basis.

By comparison, secondary market private property transactions of 2,304 units in Q1 2008 was a fall of about 40 per cent, quarter-on-quarter (q-o-q) and a fall of 57 per cent, y-o-y, while primary market transactions of about 762 units was a fall of about 48 per cent in Q1 2008 q-o-q, and a fall of 84 per cent y-o-y.

Related article:

Click here for the URA news release


ERA Realty Network assistant vice-president Eugene Lim also believes that a buoyant HDB resale market could boost HDB upgrader sentiment, but he pointed out that the strength of the HDB resale market can be attributed to 'upgraders, downgraders and permanent residents'. On the last group, Mr Lim estimates that based on in-house data, permanent residents account for about 20 per cent of the buyers in the HDB resale market.

And attention is likely to continue to be diverted away from high-end products.

'The market is not short of buyers and many astute investors have been shopping around, looking to scoop up value buys,' added Mr Lim.

CBRE Research executive director Li Hiaw Ho noted that in the private property market, most of the transactions were mid and mass-market projects with the majority of transactions in the $750-$1,000 psf price bracket.

As such, Mr Li expects sales volume of new launches to rise to between 1,200-1,400 units in Q2 2008, compared to just 762 units in Q1 2008.

Property consultants have so far been careful to not use the 'F' word to describe home prices. Most believe prices have 'plateaued' or 'softened', but not 'fallen'.

Colliers International director (research and advisory) Tay Huey Ying even believes that home prices have, 'remained stubbornly resilient to the extent that they continue to post a y-o-y increase of 20.4 per cent'.

Ms Tay also added that for the first six months of the year, home prices rose by 4.2 per cent. '(Developer's) current pricing strategy can be described as competitive, that is either similar to current market prices or marginally lower than competitors,' she added.

Ms Tay believes that home prices will continue to resist 'downward pressure' and expects prices to hold steady or decline marginally by not more than 3 per cent in Q3 2008.

Saying that mass-market prices have generally not been 'chased up' or preyed upon by the 'speculative element', Ms Tay believes this sector could be the best performing for the rest of the year.

This however needs to be put in context.

Knight Frank's Mr Mak does point out that prime property prices have increased by 52.4 per cent over the last two years. 'On this basis, it is not surprising that this market segment will lead the slowdown in price growth,' he added.

Friday, June 6, 2008

DJ MARKET TALK: Singapore Construction Faces Rising Risks -CIMB

06/06/08

DJ MARKET TALK: Singapore Construction Faces Rising Risks -CIMB

0110 GMT [Dow Jones] The Singapore construction sector is facing leaner trading conditions and investors should tread carefully, says CIMB. Broker notes private residential development subdued due to weak buyer demand, with rapid rise in construction costs putting developers' margins under pressure. Broker remains Overweight on Singapore construction sector as a whole, but turns more selective; "we recommend reduced exposure to integrated construction stocks and a switch to specialist construction companies." Adds best placed construction firms are those that have low exposure to higher construction material costs or who can manage their exposure well thanks to short project turnarounds. Says Tat Hong (T03.SG), Tiong Woon (T06.SG), CSC Holdings (C06.SG) are top picks. Latest prices: Tat Hong +0.5% at S$2.19, Tiong Woon +0.9% at S$0.58, CSC +1.7% at S$0.295. (KIG)

Monday, June 2, 2008

BT: Never too early for financial planning

Business Times - 02 Jun 2008


Never too early for financial planning

A survey of tertiary students has shown over three-quarters are clueless about investment options available. CHUA SI MIN, TOR SHI TING, WONG HAN YEE and KONG YOON KEE provide some pointers

IN THE MoneySENSE National Financial Literacy Survey 2005, almost all respondents indicated the importance of starting financial planning early. But the fact is, 17 per cent of them had not started. The survey also found that 17 per cent of respondents believed the best time to start financial planning is during school - yet only 9 per cent of them do so.

To find out why, we conducted a survey of tertiary students.

The 'save' choice

When it comes to planning their finances, most tertiary students can only think of the 'save' choice. Although 76 per cent of our survey sample do not invest, 78 per cent have a savings account. A majority of them put aside less than 10 per cent of their monthly allowance.

At an interest rate of 0.25 per cent, $1,000 in a savings account will turn into $1,002.50 at the end of the year. However, if inflation is at 5 per cent, it would reduce one's purchasing power as the savings interest rate is less than the rate of inflation.

Investing fares better, if one can find investments that offer returns higher than the inflation rate. Many students in the survey knew about the huge potential returns involved in investing, but a large majority do not invest. The two most common reasons for not investing are 'lack of financial knowledge' and 'lack of funds'.

In other words, tertiary students want investments that are affordable and easily manageable. Here are some options.

The Regular Savings Plan (RSP) and unit trusts

RSP allows you to invest a small amount of money, usually monthly, in a fund. The minimum monthly amount starts from as little as $100. There are a few RSP routes but the simplest would be through unit trusts. In a unit trust, your money is pooled with that of other investors and invested in a portfolio of different assets by a fund manager.

Among unit trusts, specialised funds and global equity funds typically manage higher returns at higher risk. Balanced funds carry moderate risk while bond funds and money market funds provide lower average returns at lower risk.

Investing in unit trusts reaps diversification benefits. By spreading your money among different investments, risk is reduced. On average, they provide higher long-term earnings than savings accounts or fixed deposits. Unit trusts can be redeemed any time without incurring penalties. They are managed by professional fund managers and are a good starting point for tertiary students lacking knowledge in direct investment.

Bonds: Singapore Government Securities (SGS)

SGS bonds are marketable debt instruments issued by the Singapore Government through the Monetary Authority of Singapore (MAS). They pay a fixed rate of interest every six months, and the principal is repaid on the maturity date. The minimum denomination is $1,000.

SGS bonds are safe investments as they are guaranteed by the government and investors can lock in a fixed interest rate - typically higher than savings interest rate - over longer periods. They can be sold easily prior to maturity, unlike fixed deposits. However, investors face a price risk if they sell prior to maturity.

Stocks

Share investors earn a return via capital appreciation/depreciation (from share price increases/falls) and dividend income (periodic payments by the company that are not fixed and can be zero).

Investors seeking high capital appreciation typically seek out profitable firms that pay low dividends, as these firms plough back earnings to expand the company rather than pay them out as dividends. These tend to be the riskier stocks. Investors desiring regular income tend to invest in lower- risk, higher dividend-paying stocks. The choice depends on one's objectives and risk appetite.

Stocks are considered riskier than bonds because their returns are more volatile. If you hold stock from a single company, your risk is not diversified. Successful stock investing requires intimate knowledge of the stocks one invests in.

Supplementary Retirement Scheme (SRS)

With the SRS, the government hopes to encourage Singaporeans to save more for their old age by means of voluntary contributions to their SRS accounts, which enjoy certain tax benefits.

Participants can contribute a varying amount to an SRS account (subject to a cap) at their own discretion. These contributions may be used to purchase various investment instruments. Each dollar of SRS contribution will reduce income chargeable to tax by a dollar. Investment gains will mostly accumulate tax-free in SRS. Tax will only be payable when you withdraw your savings from your SRS account. Furthermore, if you withdraw your savings upon retirement, only 50 per cent of the savings withdrawn will be subject to tax. You may also spread your withdrawals over a period of up to 10 years to meet your need for regular income. Spreading out your withdrawals will generally result in greater tax savings.

Take the initiative

According to our survey, the most important reason cited for not investing is lack of knowledge. But there are plenty of information sites - and even tutorials - to guide you step-by-step on how various investment tools work. If you are still clueless, MoneySENSE (www.moneysense.gov.sg) supported by MAS, is a credible site to browse. There are also many financial advisory firms with websites to educate you on the basics of investing and how to invest in unit trusts. Just make sure you do your research thoroughly before taking the plunge.

Chua Si Min, Tor Shi Ting and Wong Han Yee were final-year banking and finance students at the Nanyang Business School when they wrote this article. Dr Kong Yoon Kee is a lecturer at the school's banking & finance division.

Phillip Securites: FY08 results, Buy TP $0.45

30/05/2008

Results in line with expectation. CSC Holdings announced net income of S$43.2 (+400.3% yoy) mil on revenue of S$483.7 mil (+281.8% yoy) for FY08. Gross profit margin improved from 15.4% in FY07 to 20.2% in FY08, while net profit margin increased from 6.8% in FY07 to 8.9% in FY08. The Company proposed a final dividend of 0.5¢/sh, along with a special dividend of 0.4¢/share (tax exempt).

FY08 powered by doubling of capacity. FY08 saw the first full year contribution of L&M Foundation Specialists, a subsidiary that was acquired towards the end of FY07. The acquisition of L&M doubled CSC’s equipment fleet and capacity, which facilitated growth in both top and bottom lines. According to the management, margins were also stronger due to better economies of scale achieved. Management also attributed growth in FY08 to better pricing power amidst the current capacity crunch.

FY09 likely to be marked by geographical expansion. While growth in FY08 was largely fueled by fleet expansion, we expect CSC’s plans to expand geographically to become more apparent in FY09. While we expect results and profitability to continue strengthen into FY09, growth is more likely to be muted.

Maintain BUY, FVE S$0.45. We believe CSC is still an attractive buy at the current price, given the Company’s growth prospects, strategic positioning in the region, and the management’s prudent financial management. We maintain our BUY call on CSC, keeping to our DCF-derived FVE of S$0.45.

CIMB: FY08 results Outperform TP $0.49

30/05/2008

• Within expectations. FY08 net profit of S$43.2m (+400% yoy) was in line with our forecast of S$42.8m. Gross margins improved to 20.2% from 15.5% a year ago, attributable to improved operational efficiencies and better-margin contracts. 2HFY08 net profit rose 533% yoy to S$24.1m from S$3.8m in 2HFY07. A final dividend of S$0.005 and special dividend of S$0.004 were declared.

• Operational review. FY08 revenue rose 282% yoy to S$484m on strong demand for specialist foundation engineering (+287% yoy to S$449m) and equipment trading and leasing (+444% yoy to S$33.9m). Depreciation expenses rose sharply due to a reduction in the useful life of equipment from 15 years to 10 years.

• Improved financial position. CSC now has net cash of S$20.3m. It had managed its cash cycle well, with receivables at 38 days vs. payables at 100 days. Operating cash flow was S$50.7m vs. just S$2.2m in FY07.

• Positive outlook. Management remains optimistic of business prospects in the next few years. Current order book of S$400m is expected to expand further as it has been bidding for contracts. Management, however, acknowledged the potential adverse impact from inflationary pressures but given the nature of foundation engineering work, materials can be procured at fixed prices upon securing contracts. Also, CSC’s average contracts have short tenures of 3-6 months, which limits CSC’s exposure to fluctuating prices. A JV with Malaysia’s IJM Corporation is expected to develop new business revenues from the Middle East and India in the medium term.

• Maintain Outperform; lower target of S$0.49 (from S$0.57). With the Kok Tong acquisition aborted, we have cut our growth assumptions and reduced our net profit forecasts by 0.3-16.4% for FY09-10. We also introduce FY11 forecasts.

We continue to value CSC at 10x CY09 P/E, in line with P/E targets for industry peers. Our new target is S$0.49 (previously S$0.57) after our earnings reductions. Maintain Outperform on the back of a still-strong order book and mitigated cost pressures.

BT: CSC earnings jump five times

Business Times - 30 May 2008


CSC earnings jump five times

Strong demand for specialist foundation work, efficiency gain boost margin

By LYNETTE KHOO

RIDING the upswing in the Singapore construction sector, CSC Holdings saw its net profit soar to $43.21 million for the full year ended March 31 - five times the preceding year's $8.6 million.

Revenue almost quadrupled to $483.7 million from $126.7 million, driven by strong organic growth and contributions from three newly acquired subsidiaries. This far outpaced the 46 per cent growth reported in the Building and Construction Authority's report on the value of construction contracts awarded in 2007. Earnings per share rose to 3.85 cents from 0.87.

CSC's gross profit margin improved to 20.2 per cent from 15.4 per cent, thanks to the strong demand for specialist foundation work and improved operational efficiency.

Activity increased across all of CSC's business segments. The company attributed the quantum leap in revenue to strong organic growth and timely acquisitions. It invested $50.8 million in plant and equipment to expand its capacity and capability.

The directors have recommended a tax-exempt final cash dividend of half a cent and a tax-exempt special dividend of 0.4 cent per share. These dividends are on top of a special dividend paid out in December 2007 of 0.282 cent.

CSC is optimistic about prospects for the current financial year despite the sub-prime crisis in the US, rising building material costs, fluctuating oil prices and a general shortage of resources.

Related articles:

Click here for CSC news release

Financial statements

It managed these issues by procuring key materials at fixed prices upon securing contracts. Given that the average duration of a contract is about three to six months, the group's exposure to fluctuating prices is relatively manageable, said CSC.

CSC has also made inroads into Malaysia through a joint venture with IJM Construction Sdn Bhd and is looking to boost its revenue stream by diversifying into the Middle East and other Asian markets.

'We are committed to building our presence in the overseas markets where investment in real estate and infrastructure are rapidly growing,' said CSC chief executive See Yen Tarn.

At May 23, the group's outstanding order book was about $400 million.

CSC shares ended trading yesterday at 27.5 cents, down half a cent.