CONSTRUCTION and property development firm OKH Global turned in a loss of S$2.15 million for the second quarter ended December 2015 from a profit of S$34.8 million a year ago in the absence of income from property development as none of its projects were completed over the period.
The group follows the accounting requirement where it only recognises profits from commercial and industrial properties when they are completed; for residential properties, it uses the percentage of completion method under which profits are recognised progressively as the projects are completed.
For that reason and not helped by a reduction in third-party construction contracts, revenue fell 98.6 per cent to S$3.3 million from S$230.2 million a year ago.
In contrast, over the second quarter of the previous FY2015, its property development made revenue of S$219.3 million as as one of the group's projects, Woodlands Horizon received its TOP (temporary occupancy permit).
The builder made a loss per share of 5.97 Singapore cents for the latest quarter from an earnings per share of 5.53 Singapore cents a year ago.
For the half-year period, it made S$7.8 million loss from S$31.4 million a year ago on the back of a 97.6 per cent fall in revenue to S$5.9 million.
Last month, OKH's industrial property Loyang Enterprise obtained its TOP and another property project, Ace@Buroh is targeted for completion and TOP certification by June this year.
Therefore, sales from both property projects are expected to contribute positively to the group's financial performance for the financial year ending June 30, 2016, said the firm in an announcement.
OKH shares slipped 0.5 Singapore cent or 0.9 per cent to 55.5 Singapore cents on Friday.