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What Drove Abundante Limited’s Impressive Revenue Growth In HY2025 · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:07
  Welcome to the Deep Dive. Today, we're jumping straight into the numbers for Abandante Limited.
• 0:12
  That's right. They're Singapore domiciled listed on the SGXST.
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  And primarily known for concrete pumping services.
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  But they also have that waste management arm doing CCTV sewer inspection. Exactly.
• 0:23
  And we've got their half year 2025 statements right here. So our mission today,
• 0:28
  to figure out how they did, what drove the results, and, you know,
• 0:33
  what's the outlook? It's definitely a key update for anyone following them.
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  Abundante plays a pretty important role in specialized construction support
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  here in Singapore. Okay, so let's get to the headline figure because it really jumps out.
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  Profit before tax, the PBT.
• 0:47
  It surged massively. It really did. A 229% increase. Yeah, from around S-101,000
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  in the previous period to S-332,000 for the six months ending August 31st, 2025.
• 1:00
  That's, well, that's huge. Absolutely. You see a jump like that and you immediately
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  think, okay, something significant must have changed, right?
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  It's not just business as usual. Definitely not just incremental.
• 1:09
  So let's unpack it. Starting at the top, revenue was up 16%. Which is solid growth.
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  Went from about S-3.46 million dollars to S-4.03 million dollars.
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  16% is good, yeah, but it doesn't explain a 229% PBT jump.
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  So the real story has to be about efficiency, right? Margins.
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  That's exactly it. Look at the gross profit, the GP.
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  It more than doubled. Doubled. Yep, 101% increase from S397,000 up to $797,000.
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  That tells you they got much, much better at turning revenue into actual profit
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  before overheads. So that's where the magic happened. Yeah.
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  Doubling GP on only 16% more revenue? Mm-hmm. That screams better pricing or
• 1:49
  maybe much tighter cost control on projects or both. Most likely a bit of both.
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  It suggests a really significant positive shift in how they're executing their services.
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  You know, better contracts, better management. And that naturally flows down the income statement.
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  Profit for the period, the bottom line for owners. Also way up, a 216% increase.
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  So S325,000 compared to $103,000 last time. And earnings per share.
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  Followed right along. Jumped from 0.10 Singapore cents to 0.31 cents.
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  So yeah, financially, just a stellar performance on the P&L.
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  Right. So now the big question is why?
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  What do they actually do? The company's commentary mentions something specific. It does.
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  They directly attribute the big jump primarily to, and I quote,
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  improved project mix and pricing.
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  Improved project mix and pricing. Okay, so that confirms our suspicion.
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  They weren't just taking any job. They were selective, focusing on more profitable
• 2:40
  work. And you can really see that playing out when you look at the segment results.
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  Let's start with their main business, Concrete Pumping Services.
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  How did that do? Its profit before tax went from S-149,000 up to S-310,000.
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  So more than doubled the profit contribution from their core operation.
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  That's strong. Okay, core business firing on all cylinders.
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  But what about the other segment, the waste management, the CCTV stuff?
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  That were dragging them down before, wasn't it? It was. And this,
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  for me, is maybe the most interesting part.
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  That segment went from losing S-29,000 last period. A loss, yeah.
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  To making a profit of S$72,000 this period.
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  Wow, okay. That's a turnaround. From a $29,000 loss to a $72,000 profit.
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  How do they pull that off in just six months? Well, it points back to that improved
• 3:27
  project mix idea again, doesn't it?
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  For CCTV inspection, that likely means shifting focus.
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  Shifting focus, how? Maybe dropping, you know, smaller low-margin jobs and really
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  targeting bigger contracts, perhaps more government or large municipal work.
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  Those often have better, more stable pricing. So get selective.
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  Go for the better paying, more predictable stuff. And that swing from loss to
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  profit suggests they nailed it. It really looks like it.
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  Fixing that segment while also boosting the core business, that's a powerful
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  combination. Definitely.
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  But it wasn't all smooth sailing, was it? There were some other financial things
• 4:03
  pulling the PBT down slightly. That's right. It's important context.
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  First, their interest income was lower. dropped from S-163,000 to S-109,000.
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  Management blamed Loto interest rate pressure. Okay, less income from cash reserves.
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  What else? The other thing was other income. Last year, they had a S-100,000
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  gain because they sold off some property, plant, and equipment, some PPE.
• 4:26
  Ah, a one-off gain. Exactly. That didn't repeat this year.
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  Their gain on disposal this time was zero. So that S-100K boost from last year wasn't there.
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  So actually, if you mentally adjust for that lower interest income and the missing
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  S100 dollar K one-off gain.
• 4:42
  The underlying operational improvement was even better than the reported 229 percent suggests.
• 4:48
  Precisely. It really underscores how well they managed the core operations during this period.
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  Okay, brilliant operations on the profit side. But we need to look deeper.
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  What about the balance sheet? Did their overall structure change much?
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  Not drastically at first glance.
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  Total assets nudged up a bit from about $19.6 million to $19.9 million.
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  Pretty stable overall. So stability's good.
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  But what's happening with their actual equipment, the pumps,
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  the cameras, property, plant and equipment, the PPE line.
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  Right. That's where things get interesting again.
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  PPE actually decreased slightly from $4.795 million down to $4.35 million.
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  Mostly due to depreciation, about half a million dollars worth.
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  OK, depreciation is normal.
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  But did they buy new equipment, capital expenditure, CapEx? Ugh,
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  this is the number that really stands out.
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  Last year, in the same period, Abundante spent quite a bit on new assets.
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  How much? Around S$2,586,000.
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  So significant investment in their fleet.
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  Okay, two and a half million. And this year? This year, only S$97,000.
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  Wait, $97,000. Down from two and a half million.
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  Exactly. It's a massive drop. They basically hit pause on buying any significant
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  new equipment this half year. Wow.
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  Okay, so they delivered record profits using their existing gear,
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  but they haven't really reinvested much back into it recently.
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  Why? Are they saving cash?
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  Delaying upgrades. It certainly looks like a strategic pause,
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  maybe preserving cash. It's a critical point, especially when we look at their cash flow situation.
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  Right. Let's talk cash flow, because high profit should mean lots of cash coming in, shouldn't it?
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  But that's not what the numbers show here. No, it's actually the opposite.
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  And this is a classic accounting versus cash reality check.
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  Net cash generated from operating activities. It fell sharply.
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  How sharply? It went from over a million dollars, S1 million,
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  $38,000 in the previous period, down to just S246,000 this period. Okay, hold on.
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  PBT triples, but cash from operations tanks. How does that work? That needs explaining.
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  It primarily comes down to working capital changes.
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  Remember, profit gets booked when the service is done, not necessarily when
• 6:56
  the cash arrives. Right, accrual accounting.
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  Exactly. And their trade and other receivables, the money owed to them by customers,
• 7:02
  went up quite a bit from roughly S3 million dollars to S3.36 million dollars.
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  So they made the sales, booked the profit, but they haven't collected all the cash yet.
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  That's the biggest piece. That increase
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  in receivables sucks cash out of operations, temporarily at least.
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  And there was one other factor mentioned. What was that?
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  The filing notes that part of the receivables increase was due to an advance
• 7:26
  payment they made for buying some concrete pumping equipment.
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  Ah, so they paid cash out for equipment they haven't received yet,
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  and that also hit operating cash flow. Correct.
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  So you've got cash tied up in unpaid customer invoices and cash going out as
• 7:39
  a deposit for future assets.
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  That combination explains why operating cash was so much lower despite the fantastic
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  PBT. Okay, that makes sense.
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  High profits are real, but the cash isn't in the bank yet, and they've prepaid
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  for some future gear. This brings us neatly to the outlook.
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  Can they keep this up, especially with that CapEx pause?
• 7:59
  Well, this is where the company's own commentary gets quite cautious,
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  surprisingly so given the results they just posted.
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  Cautious how? They explicitly state that they expect the core concrete pumping
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  business to continue facing.
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  And here's the key phrase, challenging price erosion from competitors over the
• 8:17
  next 6 to 12 months. Price erosion.
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  So the improved pricing they benefited from this period might not last.
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  Competitors are pushing back. That seems to be the warning, yes.
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  It implies that maintaining those high margins is going to be tough going forward.
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  That's a bit of a shadow over the sunny results, isn't it? If prices are likely
• 8:36
  to fall, how are they planning to defend their profitability?
• 8:39
  They lay out a couple of points. Firstly, stay vigilant in operations,
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  which means keep a very tight lid on costs. Makes sense.
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  And secondly... Secondly, and this connects back to the CapEx discussion,
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  they state their intention to continue to re-fleet equipment to improve operational
• 8:56
  efficiency and productivity.
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  Ah, so replace older gear with newer, more efficient machines.
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  If you can't charge more, you need to lower your own cost of delivery. That's the strategy.
• 9:09
  Better equipment should mean lower running costs, maybe faster job completion,
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  which helps offset lower market prices.
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  And needing cash for that refleeting probably explains why they didn't declare
• 9:19
  a dividend, right? Almost certainly.
• 9:21
  The report says no dividend was declared as the group continues to monitor its profitability.
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  Translation. We need to hold on to this cash because we know we're going to
• 9:29
  need it soon for that big equipment upgrade cycle. Okay, so let's sum this up.
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  Abundante had an amazing half year, profit-wise, driven by smart choices on
• 9:38
  which projects to take in charging better prices, plus a great turnaround in
• 9:42
  their waste management segment.
• 9:43
  Absolutely. They executed really well operationally, but they're also signaling
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  that the market environment is getting tougher, with price competition heating up.
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  And their plan to combat that is to reinvest heavily in new,
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  more efficient equipment, which is why they held back on CapEx this period and
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  skipped the dividend likely to build up the cash needed for that investment. Exactly.
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  They use their current assets brilliantly to capture high margins this period,
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  but they know that future success, especially against price erosion,
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  depends critically on executing that re-fleeting strategy effectively.
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  Which leaves us with a fascinating question for you, the listener, to think about.
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  Given that huge pause in investment this half year, dropping CapEx from over
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  S$2.5 million down to less than S$100,000, how fast do they need to pull the
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  trigger on this refleeting plan?
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  How quickly must they invest in new equipment to counter that expected price
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  erosion before their current aging fleet starts to hurt the very efficiency
• 10:41
  that brought them this success?