SINGAPORE (May 30): Ley Choon Group reported a loss of $5.2 million for the 4Q ended March, sinking into the red from its 4Q18 profit of $0.3 million due to lower margins.
This brings the group to a full year loss of $9.6 million as opposed to FY18 earnings of $1.5 million a year ago.
Revenue for 4Q19 grew 2.8% y-o-y to $27.9 million from $27.1 million due to higher contributions from small diameter pipe projections, as well as the sale of construction materials.
Cost of sales however grew 30.4% to $29.7 million from $22.8 million a year ago because of higher direct cost for certain projects with deteriorating margin.
This also contributed to a quarterly gross loss margin of 6.4% to 4Q19 compared to the previous year’s 16.1% gross profit margin, which also came on the back of the completion of higher-margin projects during the period under review.
Selling and distribution expenses for 4Q fell 78.4% to $0.04 million due to lower commission expenses incurred.
Administrative expenses declined 7.7% on-year to $2.9 million, due to lower professional fees and expenses and administrative staff costs.
Finance costs grew a marginal 3.3% to $0.8 million, due mainly to higher interest rates.
In its outlook, Ley Choon says it believes strong demand from the public sector and big infrastructure projects such as Changi Airport Terminal 5 will continue to support overall construction demand.
Highlighting its recent contact wins and an unfulfilled orderbook of $128 million based on secured contracts, the group says it will continue to tender for new projects in spite of competition and rising costs.
Shares in Ley Choon closed flat at 1.2 cents on Wednesday.
