Chip Eng Seng H1 net profit jumps to S$38.5 million on higher revenue

PROPERTY developer Chip Eng Seng reported a sharp increase in net profit for the first half ended June 2022, on the back of higher revenue.

Net profit for the first 6 months of 2022 climbed to S$38.5 million from S$99,000 in H1 2021, the company reported in a bourse filing on Friday (Aug 5). On a per-share basis, earnings improved to S$0.0491 from S$0.0001 in the year-ago period. No dividend was declared, unchanged from the previous year.

Revenue rose 2.2 per cent on year to S$636.3 million in H1, mainly due to improved performance from construction, hospitality and education segments, partially offset by lower revenue from its property development segment.

Gross profit rose 48.7 per cent to S$116.6 million in H1, with higher margins achieved by the development properties, the group said.

Looking ahead, Chip Eng Seng said it will “exercise caution” while growing its development pipeline in Singapore, amid current macroeconomic factors such as rising interest and inflation rates, the Covid-19 pandemic, and geopolitical tensions from the ongoing Russia-Ukraine conflict.

In terms of the construction segment, Chip Eng Seng said construction activity picked up during the second quarter, supported partly by the relaxation of border restrictions on the inflow of migrant workers. As at end-June, the group’s order book for its construction business segment stood at S$1.33 billion, down from S$1.35 billion at end-December 2021.

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Net asset value per share for the group rose to S$0.9906 as at June 2022, up from S$0.9678 in December 2021.

Shares of Chip Eng Seng rose 0.8 per cent on Friday to close at S$0.63, before the earnings announcement.