Lian Beng clarifies pay of key execs is based on overall group performance

BUILDING contractor Lian Beng Group L03 : L03 0% said its key executives were paid more for FY2021 ended May due to the group's overall improvement in profitability.

The company attributed this improvement to better performance at its property development and other business segments.

Lian Beng had, on Monday, responded to a question from a shareholder on why the group's remuneration for its key executives was higher than the previous financial year when net profit, excluding government grants, was lower.

At the time, Lian Beng had said the remuneration included a bonus component based on overall profitability. "Both the additional operating costs incurred due to the ongoing Covid-19 pandemic and government grants received to help defray such costs were included in the computation," Lian Beng said.

In a statement to The Business Times on Thursday, Lian Beng sought to provide additional information on its statement.

"While the grants helped the group mitigate the impact of Covid-19 on its construction business by defraying certain operating costs, the actual expenses incurred by the Group due to Covid-19 were higher than the grant amount received," the company said.

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For the full-year ended May 2021, Lian Beng's net profit declined 9 per cent to S$26.1 million from S$28.7 million a year ago.

This was largely driven by a 7.5 per cent decline in revenue to S$514.5 million amid a pandemic-led slowdown.

Lian Beng noted in its FY2021 results that Covid-related government grants and incentives amounted to S$18.5 million in the period - S$11.8 million higher than the previous year.

Other operating expenses increased by S$1.0 million to S$10.1 million in FY2021, mainly due to higher grant expenses of S$1.1 million in relation to property tax rebate given to tenants.

Shares of Lian Beng closed up 0.5 Singapore cents or 1 per cent at 52 cents on Wednesday.

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