Property developer and construction company Koh Brothers reported earnings of $2.9 million for the 2HFY2020 ended December, putting it back in the black from the $17.8 million net loss posted in 1HFY2020.
Y-o-y, the group’s earnings were 14% lower compared to earnings of $3.4 million in the 2HFY2019.
2HFY2020 earnings per share (EPS) came in at 0.71 cents on a fully diluted basis compared to EPS of 0.83 cents the year before.
For the FY2020, however, the group posted a net loss of $14.8 million, mainly due to the adverse impact from the Covid-19 pandemic, in particular the Construction and Building Materials division.
FY2020 loss per share stood at 3.59 cents on a fully diluted basis compared to 1.40 EPS in the FY2019.
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2HFY2020 revenue fell 28% y-o-y to $138.9 million primarily due to lower revenue recognition from the Construction and Building Materials division and offset partially by higher contribution from the Real Estate division, which launched a new residential project in January 2020.
2HFY2020 gross profit increased 54% y-o-y to $12.7 million due to a one-off provision of some $3 million relating to a construction project a year ago.
Share of results from associated companies and joint ventures fell 76% y-o-y to $1.8 million due to absence of fair value gain and lower profit contribution from joint venture.
FY2020 revenue fell 31% y-o-y to $243.1 million due to lower revenue recognition from the Construction and Building Materials division.
The circuit breaker measures from April to June 2020, which halted most of the group’s construction projects and delayed schedules, severely impacted the group’s business.
Share of profit from associated companies and joint ventures declined 66% y-o-y to $5.8 million in FY2020 due to absence of fair value gain and lower profit contribution from a joint venture.
Other gains rose 169% y-o-y to $3.1 million mainly due to fair value gain on investment securities.
As at Dec 31, 2020, cash and cash equivalents stood at $101.8 million.
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Looking forward, the group says it expects the construction industry to remain challenging due to competition, supply chain disruption, manpower shortage and higher cost of construction materials.
It adds that the private residential market is expected to remain stable, and that it will “step up efforts” to replenish its land bank selectively.
“For our Construction and Building Materials division, with the gradual recovery of construction demand led by public sector projects, we will continue to tender for projects where we have a strong track record, related experience and capabilities to ensure a consistent strong order book,” says Francis Koh, managing director and group CEO.
“As for our real estate development business, with the re-opening of the Singapore economy in Phase 3, we have stepped up on our marketing efforts, including leveraging on virtual platforms with full interactive features for sales of the remaining units in Van Holland. We will continue to adopt a cautious approach, keeping a lookout for quality and strategically located land plots in Singapore and in the region, with good proximity to amenities and transportation nodes,” he adds.
As at 9.08am, shares in Koh Brothers are trading flat at 15.8 cents.
