CSE Global profits drop 19.3%

The lower earnings were driven by a shift in business mix towards lower-margin data centre projects.

CSE Global Ltd net profits fell 19.3% year-on-year to $13.2m in the first half of 2026, despite higher revenue, whilst adjusted net profit declined 12.4% to $13.9m from $15.9m a year earlier.

The engineering solutions provider said gross profit rose 8.8% to $133.7m, but gross profit margin narrowed to 23.8% from 27.9% in the first half of 2025. Operating profit edged up 1.3% year on year.

The lower earnings were driven by a shift in business mix towards lower-margin data centre projects, where the group procures materials on behalf of hyperscale customers. Margins were also affected by lower profitability from large greenfield electrification projects and costs related to the wind-down of water and wastewater projects in the Americas.

Operating expenses increased 7.9% to $109.4m, mainly due to higher personnel costs associated with ramping up a new manufacturing facility in the Americas, expanding its electrification business in the region, and establishing a new communications distribution entity in Australia.

The company also incurred higher building and equipment costs linked to the new manufacturing facility, increased materials consumption from data centre activity, a one-off irrecoverable withholding tax on payroll-related activities, and a provision for expected credit losses on accounts receivable.

Meanwhile, other operating income fell to $0.5m from S$3m a year earlier due to the absence of a non-recurring foreign exchange gain recorded in the prior-year period.

Net interest expense also increased following higher borrowings used to support the group's business expansion.

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