Tiong Seng performance hit by 'circuit breaker'; says road to recovery 'long and challenging'

CONSTRUCTION group and property developer Tiong Seng Holdings on Thursday said the budgets of its ongoing projects, as well as the group's overall performance, has been hit by Singapore's "circuit-breaker" measures.

The company was responding to questions from the Securities Investors Association (Singapore) in relation to its annual report for the financial year ended Dec 31, 2019.

Tiong Seng said it had temporarily ceased operations of its construction and engineering solutions projects at various sites in compliance with government measures, resulting in "no revenue except from some essential works".

While the government has provided various relief measures to help businesses cope with these closures, they were "not adequate" to defray salaries of staff and workers, and cover other operating overheads that the company was required to incur during the period, it said.

The company's foreign workers are currently being housed in dormitories across Singapore, including a purpose built dormitory, factory-converted dormitories, temporary quarters at construction sites, as well as temporary occupation licence sites.

The developer added that it had also recorded delays in the contracted timelines of various ongoing projects, but will be availing itself to relief under the Covid-19 (Temporary Measures) Bill that temporarily protects businesses from being unable to fulfil certain contractual obligations due to the pandemic.

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Concurrently, company is also applying for an extension of time with clients to extend the contractual period, it said.

The company described its road to recovery as "long and challenging", but said its investments in construction technologies will help it quickly mobilise resources to cope with the increase in construction activity as operations gradually resume.

These technologies include its in-house prefabrication production facilities in Singapore and Malaysia.

In its Q1 update on May 15, Tiong Seng said it was not able to reasonably estimate the full extent of the pandemic and "circuit-breaker" measures on its financial position, results of operations, or cash flows in the future, due to to the uncertain and fluid situation.

However, its net results for subsequent periods are expected to be "extremely challenging" compared to last year, it said.

Nevertheless, the company does not expect to face any material uncertainties concerning its ability to fulfil its near-term debt obligations or continue as a going concern, it said, citing a "healthy cash position" of about S$59 million as at March 31, 2020.

Shares of Tiong Seng closed flat on Thursday at 16.5 Singapore cents.