Lian Beng says Covid-19 government grants helped boost remuneration for key execs

Jude Chan

Published Mon, Sep 27, 2021 · 02:05 PM

BUILDING contractor Lian Beng Group has disclosed that government grants received to help defray additional operating costs due to the Covid-19 pandemic had factored into higher remuneration payable to its key executives for the FY2021 ended May.

"The remuneration payable to the key executives of the company includes a bonus component which is calculated based on the overall general profitability of the group. 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," the group said in a bourse filing on Monday.

"The slight increase in remuneration is in line with the slight increase in profitability of the group," it added.

The statement was in response to a question the company had received from a shareholder ahead of its annual general meeting (AGM) on Tuesday.

The shareholder had asked the group why the remuneration for its key executives was higher than the previous financial year when net profit, excluding government grants, was lower.

For the full-year ended May 2021, Lian Beng had posted a 9 per cent drop in net profit attributable to shareholders to S$26.1 million, from S$28.7 million a year ago.

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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, some S$11.8 million higher than the previous year.

Meanwhile, other operating expenses had 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 1 per cent or half a Singapore cent higher at 51.5 cents on Monday, before the announcement.

Clarification: In a statement provided to The Business Times on Thursday, Lian Beng said that the government's grants helped the group mitigate the impact of Covid-19 on its construction business by defraying certain operating costs but that the actual expenses incurred by the group due to Covid-19 were higher than the grant amount received. It also attributed the improved profitability to the better performance of its property development and other business segments.

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