Lum Chang's FY net profit dips on fair value losses, absence of divestment gain

CONSTRUCTION cum development group Lum Chang Holdings reported a one per cent dip in net profit for the full year ended June 30 to S$29.5 million, mainly due to fair value loss on investment properties and an absence of divestment gain.

Lum Chang racked up S$2.9 million in fair value losses on investment properties instead of a S$4 million gain a year ago; it also recognised a S$11.5 million gain on disposal of a wholly owned subsidiary that owned the freehold interest in a mixed-use property in London.

But revenue was 36 per cent higher at S$426.1 million due to the commencement of revenue recognition for two construction projects, which reported revenues amounting to S$141.5 million. No revenue was recognised for these projects in the previous year as the construction back then had not reached the stage for revenue recognition to kick in.

This was offset by lower revenue of S$131.4 million from construction projects that were substantially completed as of June 30, and lower revenue of S$14.1 million from a Malaysian development.

In July, Lum Chang secured a S$60.8 million contract for the construction of a new high specification industrial building in Kallang from Mapletree Industrial Trust. The contract covers asset enhancement works for three existing buildings. Work comenced in early August and will be carried out in seven phases.

The total outstanding value of construction projects still in progress as of June 30 was S$560 million, Lum Chang said.