Why is Lum Chang declaring a large dividend despite lacklustre results?

LUM Chang Holdings last Tuesday reported its results for its first half ended December, with earnings significantly lower than the prior year. What stood out, however, was the high dividend being declared.

The construction firm saw revenue for the half-year fall 30 per cent to S$130.9 million from a year ago. This was mainly due to slow resumption of work at two construction sites, and lower revenue from two construction projects that were substantially completed in the previous financial year.

Net profit for the half-year fell to S$159,000 from S$7 million, with earnings per share plunging to 0.04 Singapore cent, from 1.85 cents a year earlier.