The Story

Soilbuild Construction’s business roots can be trace back to a legacy of over 36 years in the construction sector, with its subsidiary quickly established itself as a general contractor capable of handling a diverse range of constructions, including residential buildings, schools, churches, and industrial parks.

In May 2013, Soilbuild Construction (“Soilbuild”) was listed on the Singapore Exchange (SGX), marking a significant milestone in its history. The company leveraged its strong track record and A1 grading from the Building and Construction Authority (BCA), which allowed it to tender for public sector projects of unlimited contract value. This capability positioned Soilbuild favorably for future government contracts and large-scale private developments.

Over the years, Soilbuild has completed more than 200 properties, earning recognition through various architectural and environmental awards. The firm diversified its operations into precast and prefabrication services, enhancing its capabilities and market reach.

During and post pandemic, the Group faced rising costs for materials and labor as the company honored existing contracts while navigating a changing business landscape.

The TURNAROUND

In 2023, the tide began to turn with Mr Lim Han Ren (the second generation) taking over as Group CEO, with a net profit of S$7.3 million for the fiscal year and also declared dividends to reward shareholders.

This turnaround was largely due to a combination of strategic project management, operational improvements, and market conditions.

More specifically,

1. Strong Order Book of more than S$1 billion: By August 2024, Soilbuild had built an impressive order book valued at S$1.25 billion, which is more than five times its full-year revenue for 2023. This robust pipeline of contracts included significant projects such as a S$647.5 million contract at Tuas Port, the largest in the company’s history. This strong order win momentum provided visibility and stability for future revenues. For more context, the Group’s full year revenue averaged about S$250 million over the past 2 years.
2. Focus on Digital Transformation Initiatives: Soilbuild invested in digital transformation efforts aimed at improving efficiency in project planning and execution. These initiatives have enhanced their tender processes and operational management, leading to improved client satisfaction and project delivery timelines.
3. Strong Market Outlook: The construction sector in Singapore began to recover post-pandemic, with increased demand projected by the Building and Construction Authority (BCA). The expected construction demand is set to range between S$31 billion and S$38 billion annually from 2025 to 2028, which bodes well for established contractors like Soilbuild.
4. Improving Financial Performance: For the first half of 2024,, Soilbuild reported a net profit of approximately S$7.4 that surpassed its FY2023 results of S$7.3 million. With the completion of legacy projects, this momentum was mainly attributed to both revenue growth and improved gross margins as the company capitalized on its newly secured projects.
5. Dividends: Demonstrating its commitment to reward shareholders, Soilbuild issued dividends the moment they became profitable. In FY2023 - a dividend of 0.1 cents per share and for 1HFY2024 – a interim dividend of 0.1 cents per share
6. Sustainability: The firm has also embraced sustainability as a core aspect of its operations, aligning with industry trends toward green building practices. Its commitment to environmental stewardship is evident in projects like DB Schenker’s sustainable logistics facility.

In summary, Soilbuild’s story is one of evolution—from humble beginnings to overcoming adversity and positioning itself as a key player in an essential industry.

Why now?

Singapore’s construction industry is buzzing with activity. The Building and Construction Authority (BCA) forecasts annual construction demand to hit S$31 billion to S$38 billion from 2024 to 2028. High-profile projects like the expansion of Changi Airport Terminal 5 and integrated resorts are set to drive demand, alongside public housing initiatives. Soilbuild, with its proven track record and strong order book, is well-positioned to capitalize on this boom.

Moreover, industry analysts are bullish on the sector. PhillipCapital’s Paul Chew, for example, maintains an “overweight” rating on construction in a recent report, highlighting the sector’s growth potential.

Why Soilbuild Construction?

Soilbuild’s story is more than just a tale of corporate resilience; it’s a blueprint for growth in a dynamic industry. Helmed by the second generation, the Company’s ability to rebound, its impressive project pipeline, and its alignment with long-term market trends make it a compelling player in the construction sector.

With positive industry outlook and a robust order book, Soilbuild definitely deserves a closer look in 2025 ahead.

The info here is for reference only and please do your own due diligence.