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Lian Beng Q3 net profit halves to S$3.6m

LIAN Beng raked in 55.3 per cent lower profit of S$3.6 million for the quarter ended February as it was hit by higher cost of sales and a S$3.1 million loss from its associates and joint ventures. These hit the firm's bottom line, which was S$8.1 million (restated) in the preceding year.

The listed main contractor's financial results for the third quarter of fiscal year 2019 released on Friday saw its cost of sales go up 6.5 per cent year-on-year to S$70.1 million, mainly due to an increase in construction cost.

Its share of results of associates and joint ventures turned from a profit of S$2.5 million a year ago into a loss of S$3 million. This was mainly due to losses recorded by associates in the property development segment as a result of adjustments in borrowing costs made to Affinity @ Serangoon and Riverfront Residences, in accordance with the new Singapore Financial Reporting Standards (International), along with a lower share of profit from joint ventures.

Lian Beng, as a result, ceased capitalisation of the borrowing costs relating to the development properties that are ready for its intended sale. 

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Consequently, earnings per share for the quarter stood at 0.73 Singapore cent, down from 1.62 Singapore cents in the year-ago period.

Revenue was up 0.4 per cent from S$90.6 million to S$91 million.

Net asset value per share was flat at S$1.3555 as at Feb 28, compared to S$1.3502 as at May 31, 2018.

Construction order book stood at S$1.26 billion as at Feb 28, which is expected to provide a steady flow of activity through FY2022.

In the regulatory filing, the company said it continues to adopt a cautious view of the residential property market, as cooling measures implemented by the government continue to weigh on the market segment, and will continue to monitor the property market closely for opportunities to replenish its land bank.