Lian Beng posts 12.8% drop in net profit

LIAN Beng on Wednesday posted a 12.8 per cent drop in net profit to S$28.7 million in its FY20 ended May 31.

This was partly due to its higher share of loss of associates of S$10.9 million (compared to S$246,000 in FY19) due to its share of fair-value loss of investment properties held by associates of S$13.8 million.

This was offset by higher development profits recognised from Riverfront Residences and Affinity @ Serangoon as the projects progressed.

Revenue rose 43.8 per cent to S$556 million due to higher revenue generated from the construction segment, thanks to the progressive revenue recognition of construction projects for about the first 10 months of FY2020.

The group did not record much revenue for the months of April and May as a result of the circuit-breaker measures implemented by the Singapore government to combat the Covid-19 pandemic, it said.

Excluding the decrease in the fair value of the investment properties held by its subsidiaries, associates and joint ventures, the government grant income and grant expense, the profit attributable to owners would have been S$25.5 million, similar to S$25.1 million in FY19, it said.

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Lian Beng added that while a controlled restart of some construction activities has since been allowed, the pace of resumption has been slow as a substantial proportion of the foreign construction workforce is still under quarantine.

It expects to incur additional costs to comply with the government's worksite requirements prior to resuming work. Along with the uncertainty and other challenges brought about by the pandemic, it also expects its performance in FY21 to be affected.

It has an order book of S$1.6 billion, which should support the group's activities through FY23, subject to the extension of time granted by the developers.

On the property development front, work on the development of its current projects has been suspended.