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Koh Bros Q3 net profit down by 38.6% to S$1.01 million on construction weakness

MAINBOARD-LISTED construction player Koh Brothers saw third-quarter net profit plunge on lower sales, as the construction and building materials division recognised less revenue.

Earnings for the three months to Sept 30 fell by 38.6 per cent year on year, to S$1.01 million, as turnover dropped by 20.9 per cent to S$94.4 million, according to results out on Thursday.

Besides the lower revenue, the fall in the bottom line came on a drop in rental and other income, despite greater contributions from share of associates’ and joint ventures’ profits as Koh Brothers recognised profit from its 45 per cent-owned mixed-use project in Seoul.

Earnings per share slipped to 0.24 Singapore cent, from 0.4 Singapore cent before.

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For the nine months, net profit was down by 12 per cent to S$3.36 million, while revenue fell by 6 per cent to S$255.7 million.

Managing director and chief executive Francis Koh pointed to the construction business order book of S$906.6 million as at Sept 30, which includes a contract to build pumping stations at Tuas Water Reclamation Plant that is expected to be completed in 2025.

The group noted in its outlook statement that the private home market is expected to be challenging with more launches coming on board, and Mr Koh said that “we continue to monitor the real estate market closely to launch our development projects at an opportune time”.

Koh Brothers is looking to launch sales for its wholly owned Van Holland project in the Holland Village area, which redeveloped the former Toho Mansion. The company added that it “will be cautious and selective in building up our land bank”.

No dividend was recommended. The company noted that it does not declare a quarterly payout.

Koh Brothers shares saw no action on Thursday but last closed at S$0.205.