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Chip Eng Seng Corp doubles Q4 profits to S$26.6 million on condo project turnover

MAINBOARD-LISTED construction group Chip Eng Seng Corp more than doubled its profits in the fourth quarter, on the back of both revenue growth and heftier contributions from associates.

Net profit jumped by 102.4 per cent to S$26.6 million for the three months to Dec 31, 2018, up from S$13.1 million the previous year, according to results released on Friday.

This tracked a 26.6 per cent rise in revenue, to S$245.5 million, as well as a quintupled share of results from associates, which came in at S$2.55 million, from just S$390,000 before.

The higher turnover was driven by the progressive recognition of property division contributions from High Park Residences, Grandeur Park Residences and Park Colonial, which are condominium projects in Singapore, as well as the sale of property in Australia.

These revenues, along with contributions from a resort in the Maldives and two new hotels in Australia, helped to make up for the lower revenue in construction, where some projects are almost finished.

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Earnings per share for the quarter was 4.25 Singapore cents, against 2.11 Singapore cents previously.

For the full year, net profit grew by 92.8 per cent to S$63.1 million, with revenue higher by 44.9 per cent, to S$828.6 million.

Chip Eng Seng said in its outlook statement that the Singapore property market is still expected to be challenged by the impact of cooling measures and rising interest rates on private home prices.

Meanwhile, it plans to tender for public non-housing and civil engineering projects in its construction segment, "to reduce its over-reliance on the increasingly competitive public housing sector", it said. The construction order book stood at S$425.5 million as at end-2018.

The board has recommended a dividend of four Singapore cents a share, the same as in the year prior.

Chip Eng Seng added half a Singapore cent, or 0.69 per cent, to S$0.725, before the announcement.

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