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Chip Eng Seng reverses to losses in H1 2020 on Covid-19 impact
PROPERTY development and construction firm Chip Eng Seng on Monday posted a net loss of S$24.4 million for its first half ended June 30, reversing from a net profit of S$15.2 million a year ago.
This came on the back of a 42.5 per cent decline in revenue to S$290 million, as the group's operations were "adversely affected" by measures taken by the government to tackle the spread of the coronavirus. Most of the group's construction and development sites have been closed since April 7.
"As a results of stoppage of construction, minimal revenue was recognised for the affected projects since April 7, 2020 till the end of H1 2020," it said.
Revenue contribution from all its divisions fell, except for the education division. Profit margins also narrowed as a result of additional costs due to Covid-19. Its bottom line was partially cushioned by lower finance costs and recognition of government grants meant to mitigate the impact of the pandemic.
The firm expects the outlook for the construction sector to remain challenging as most of the construction sites of the group have been affected by the Covid-19 measures and have yet to resume work. Furthermore, the group expects the shortage of manpower and disrupted supply chain to affect the progress of construction activities even after work resumes, it said.