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Chip Eng Seng Corp reports lower Q2 profit on increased income tax expense
WEIGHED down by higher income tax expense, Chip Eng Seng Corp's net profit for the second quarter ended June 30 fell to S$14.27 million, down around 33 per cent from the corresponding quarter a year ago.
This was despite total revenue rising 18.9 per cent year on year to S$234.3 million in 2Q2016, which came on the back of higher revenue from the property development and hospitality divisions.
Earnings per share for the quarter fell to 2.30 cents, down from 3.42 cents a year ago.
For the half-year period, net profit was 62 per cent lower at S$15.09 million while revenue was down 4.9 per cent at S$346.15 million.
"As the group expects (the) Singapore private residential market to remain challenging, it will be selective and cautious in its land purchases in Singapore," said Chip Eng Seng.
On its construction business, it commented: "The group expects competition for public housing projects to become more intense. Whilst continuing to participate in the tender of these projects, it is also looking for ways to expand its portfolio beyond public housing to include other public projects."
It also plans to act prudently in expanding its commercial building portfolio, given the softening commercial rental market in Singapore.
However, it was more upbeat on the hotel sector as it turned in a better performance in H1 2016 despite an increasingly challenging business environment.
"The group will continue to look out for suitable hotels around the region to add to the group's hospitality division," it added.