Lian Beng Q2 earnings jump 51% as revenue doubles

MAINBOARD-LISTED Lian Beng recorded a 51.1 per cent increase in net profit to S$11.2 million for the second quarter ended November, while revenue doubled to S$164.7 million. This translates to earnings per share of 2.24 cents for Q2, compared to 1.48 cents a year ago. 

The company also declared a S$0.01 interim dividend, unchanged from a year ago, to be paid out on Feb 10. 

The rise in Lian Beng's Q2 revenue came from both its construction and property development segments. Higher revenue in the former segment arose from projects in their initial stages, while the latter segment benefited from contributions of the Mactaggart Foodlink industrial property. 

The increase in the level of construction activity enabled Lian Beng to record a 44.2 per cent increase in gross profit to S$24.8 million in Q2, compared to S$17.2 million a year ago. Lian Beng also recorded a S$600,000 gain on disposal of a former subsidiary that held the development site at 50 Lorong 21 Geylang.

For H1FY2020, Lian Beng saw net profit rise 37.7 per cent to S$18.6 million, on the back of a 88.4 per cent jump in revenue to S$311.4 million. 

The company's order book to date stands at S$1.6 billion, which it believes will give support through FY2023. As at end-November, Lian Beng had S$172.4 million in cash. 

It has secured a total of four contracts worth an aggregate S$693 million since the start of FY2020. Most recently, in December 2019, it clinched a S$178 million contract via its unit, United Tec Construction Pte Ltd, to construct a 640-unit private residential development at Clementi Avenue 1. 

Lian Beng said that it is "cautiously optimistic" about the construction industry, even as demand hit a five-year high in 2019 and is projected to remain strong in the year ahead.

"At the same time, through its property development subsidiary SLB Development Ltd, it will continue to monitor the property market closely for opportunities to replenish its land bank, while also embarking on its new fund management business," the company said in its press release. 

Lian Beng shares closed flat at S$0.525 on Monday.