Ley Choon posts Q4 net loss of S$5.84m on higher project costs

CATALIST-LISTED construction firm Ley Choon Group Holdings on Wednesday posted a loss attributable to owners of S$5.84 million in the fourth quarter ended March 31, compared to a profit of S$162,000 in the year-ago period.

This was despite revenue edging up 2.8 per cent to S$27.9 million. Due to an increase in direct cost for some projects with deteriorating margins and the completion of higher-margin projects during the period, the fourth quarter saw a gross loss of S$1.8 million, with a gross loss margin of 6.4 per cent. This is in contrast to a gross profit of S$4.4 million and a gross profit margin of 16.1 per cent for Q4 2018.

Full-year loss was S$9.6 million, down from a S$1.5 million profit attributable to owners in the previous year. Full-year gross profit was S$4.7 million, down 71.5 per cent from the year before, with a gross profit margin of 4.6 per cent, down from 15.7 per cent.

Loss per share for the fourth quarter was 0.49 Singapore cent, compared to earnings per share of 0.01 Singapore cent in the year-ago period. No dividend was declared.

Ley Choon said it expects the construction outlook to be supported by strong demand from the public sector, with big infrastructure projects such as the Cross Island Line, developments at Jurong Lake District and Changi Airport Terminal 5.

As announced on Apr 24, the group has secured four contracts worth about S$20.5 million in total for the supply and laying of pipes and underground services.

"Despite competition and rising costs, the group will continue to tender for new projects," said Ley Choon. Its unfulfilled order book based on secured contracts stands at about S$128 million.

Ley Choon closed unchanged at 1.2 Singapore cents on Wednesday before the results release.