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Chip Eng Seng's Q2 profit up 15%, lifted by property development division

MAINBOARD-LISTED property and construction group Chip Eng Seng Corporation on Tuesday posted a 14.9 per cent rise in the second-quarter net profit to S$21.4 million, or earnings per share of 3.42 cents.

The earnings for the three months ended June 30, 2015, were boosted by the property development division. Total revenue rose 59.4 per cent to S$197.1 million for the quarter.

Revenue from property developments rose 189.2 per cent to S$106.5 million, mainly due to higher progressive recognition of a development project known as Nine Residences & Junction Nine in Yishun.

Construction revenue remained comparable year on year at S$86.4 million, up slightly from S$85.1 million a year ago.

Revenue from hospitality came in at S$1.5 million for the quarter, attributable to the group's maiden hotel - Park Hotel Alexandra - which commenced business in May 2015.

Revenue from property investments and others rose 56.8 per cent to S$2.7 million, due principally to rental income contributed by CES Centre, which commenced its leasing business from Q1 2015.

The company said: "Despite the challenging outlook for property market, the group did well in its recent launch of High Park Residences. The development achieved a remarkable sale with more than 80 per cent units sold in the first week of its debut. In the remaining of second half 2015, the group will continue to market the remaining units of High Park Residences whilst preparing for relaunch of Fulcrum. The group will continue to exercise prudence in its land acquisition in Singapore."

The company added that in Australia, its Williamsons Estate, a suburban project with 104 townhouses and one apartment block, had seen a strong take-up rate in Q2. To-date, more than 90 per cent of the townhouses have been sold.

Preparation works are now underway to launch the apartments of this project in Q1 2016, said the company.

Meanwhile, the litigation involving Tower Melbourne is on-going with certain rulings expected before the end of 2015.