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Chip Eng Seng Q4 profit drops 94.2% to S$9.8 million

CHIP Eng Seng Corp's fourth-quarter net profit dropped 94.2 per cent to S$9.8 million on less revenue from property developments, the building and development company announced on Thursday after the market closed.

On a per-share basis, profit was 1.57 Singapore cents for the three months ended December 2015. Chip Eng Seng is declaring a 4.0 Singapore cent per share dividend for the year. The stock closed at 65 Singapore cents on Thursday before the results were announced.

For the full year, Chip Eng Seng's profit fell 77.6 per cent to S$63.0 million, or 10.11 Singapore cents per share.

Revenue decreased by 58.3 per cent to S$153.9 million during the quarter, dragged mostly by a 74.2 per cent decline, to S$74.7 million, in property developments. Development sales recognised during the quarter came mostly from two projects - Nine Residences and Junction Nine in Yishun, and High Park Residences in Fernvale Road. The drop from the year-ago period was mostly attributed to the absence of the previous year's revenue from the by-now completed Alexandra Central retail project.

Construction revenue decreased by 9 per cent to S$70.4 million in the fourth quarter.

Looking ahead, Chip Eng Seng guided for challenging conditions in the property development and construction sectors, but was expecting an improvement in its hospitality business. The company, which in December hired United Overseas Bank to advise on spinning off its construction business, said it will provide an update "in due course".