Lian Beng's Q2 net profit falls 43% on higher costs
Singapore
CONSTRUCTION cum developer group Lian Beng on Friday said its net profit fell 43.2 per cent to S$3.2 million for its second quarter ended Nov 30, 2017, due to higher cost of sales and higher distribution expenses and finance costs.
For the quarter, revenue rose 2.5 per cent to S$50.5 million. Cumulatively, its revenue for the first six months of its fiscal year fell 27 per cent to S$87.6 million, due to lower contribution from the construction segment.
Net profit for the first half fell 33.7 per cent to S$12.2 million, partly due to its lower profit margin from the construction segment, but also because of the marketing and leasing agent's fee for its investment property at 50 Franklin Street in Melbourne, Australia, and higher finance costs due to its increase in borrowings to finance the purchase of investment properties and securities.
The group is declaring an interim dividend of S$0.01 per share - the same as last year's - payable on Jan 30, 2018.
The group's net construction order book stood at S$972 million as at end-Nov 2017, which it said will provide a steady flow of activity through FY2022.
This includes the S$136.8 million contract to build a condominium at Potong Pasir Avenue 1 and the S$199.5 million contract to build a residential development at Serangoon North Avenue.
The group has also earlier said that it is exploring a spin-off of its property development business on the Catalist Board, and will convene an extraordinary general meeting to seek shareholders' approval in due course.
"In light of the above positive indicators, the group is cautiously optimistic of the construction and property outlook for the next 12 months," Lian Beng said. Its share price closed 2 per cent higher at S$0.765 on Friday.
