BRC Asia: More Than Just Statutory Profit

BRC Asia (SGX:BEC) has been making waves in the steel industry, and its recent earnings report is a testament to its resilience and growth. The company's earnings growth rate of 26% and revenue growth rate of 17.6% are impressive, but what sets BRC Asia apart is its ability to generate earnings beyond just statutory profit. Let's dive into the factors that contribute to BRC Asia's exceptional performance.



1. Acquisitions and Diversification: BRC Asia's acquisition of Lee Metal Group in 2018 was a game-changer. This strategic move made BRC Asia one of the largest reinforcing steel fabricators in Singapore, unlocking economies of scale and opening up new growth avenues. The acquisition also brought about a new level of engagement among staff and reinforced friendships and camaraderie at and across all levels, making the company stronger after the pressure and struggles of the Covid-19 years.
2. Brand Awareness: BRC Asia has successfully enhanced its brand awareness and reputation in the industry, becoming as renowned as Xerox in the printing space. This has opened up new growth avenues, such as a wholesale business selling steel to other steel fabricators in Singapore and an international trading business sourcing steel for end-users outside of Singapore.
3. Expansion into Overseas Markets: BRC Asia plans to use its new international trading business to ease its way into more overseas markets, entrenching or extending its trading into stocking, and eventually fabrication. This strategy will enable BRC Asia to grow its revenue and earnings beyond the Singapore market.
4. Strong Financial Performance: BRC Asia has demonstrated a strong track record of financial performance, with earnings growing at an average annual rate of 26% and revenues growing at an average rate of 17.6%. The company's return on equity is 19.7%, and it has net margins of 6.3%, which are higher than the industry averages.



BRC Asia's earnings growth beyond statutory profit can be attributed to several key factors, including acquisitions, brand awareness, expansion into overseas markets, and strong financial performance. The company's ability to generate earnings beyond just statutory profit makes it an attractive investment opportunity for shareholders and stakeholders.

As an investor, it's essential to look beyond just the statutory profit when evaluating a company's earnings. By considering the factors that contribute to BRC Asia's exceptional performance, you can make a more informed decision about investing in the company. So, if you're looking for a steel industry player with a strong track record of earnings growth and a promising future, BRC Asia should be on your radar.