The Business Times | 12 Apr 2013
Profit fall due to absence of gain, higher operating expenses
Construction company Lian Beng's net profit for the nine months ended Feb 28, 2013 fell 25.7 per cent to $30.14 million from $40.56 million a year earlier, as a result of an absence of a gain on sale.
In the corresponding period a year ago, the group recorded a gain of $7.90 million from the sale of an industrial property on New Industrial Road.
The absence of the gain in the current year caused a 38.1 per cent decline in "other operating income" to $7.54 million from $12.17 million. The builder also racked up higher "other operating expenses" of $3.85 million from $2.90 million previously due to the depreciation of property from the inclusion of its Sungei Kadut factory.
Nine-month earnings per share fell to 5.69 cents from 7.66 cents a year ago. Net asset value was 47.44 cents, up from 43.69 cents at end-May, 2012.
Turnover of the group grew 5.1 per cent to $350.66 million from $333.65 million a year earlier.
While its construction business is still the main source of revenue, contributing 75 per cent of sales, the group is increasingly involved in property development, which accounts for 4 per cent of revenue. The remainder comes from its ready-mixed concrete business.
Revenue from its development properties rose to $190.4 million from $96.7 million, as at May 31, 2012.
This led to bank borrowings more than doubling to $259.7 million from $111.1 million, to finance works at its Spottiswoode Suites, Hougang Plaza and Mandai Estate projects.
Cash and cash equivalents at the end of the nine-month period have gone down to $161.82 million from $178.34 million previously.
"Our strong order book, including the recent contract wins of Bartley Ridge, and projects at Sunview and Tampines, reached $986 million, as at April 11, 2013," said Lian Beng's executive chairman, Ong Pang Aik.
The projects will run into FY2016.
The group said it was cautiously optimistic about its prospects given strong construction demand in the public sector for housing developments and institutional and civil engineering, even as the private property sector slows down.
The counter closed half a cent higher at 49 cents yesterday.
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