SINGAPORE (Nov 13): Infrastructure construction company Ley Choon Group Holdings saw its earnings plunge 88.7% to $0.5 million in the 2Q ended September, from $4.7 million a year ago.
This was mainly due to the absence of a one-off gain on disposal a year ago for the office building at No 4 Sungei Kadut Street 2.
As a result, other income tumbled 88.7% to $0.5 million, from $4.3 million a year ago.
Revenue fell 5.8% to $27.8 million during the quarter, mainly due to lower revenue contribution from small diameter pipe projects as a result of completion of projects, as well as a decrease in sales of construction materials.
Gross profit dropped 32.7% to $4.6 million in 2Q18 from $6.8 million a year ago, as gross profit margin fell 6.6 percentage points to 16.5%.
The decrease in gross profit and gross profit margin were due mainly to higher operational costs and change in project mix.
As at end September, cash and cash equivalents stood at $8.9 million.
To date, the group has a total unfulfilled order book of S$139 million.
“Second quarter for the construction industry in Singapore continued to be challenging due to rising operational cost and strong competition for projects. Nonetheless, we managed to overcome the challenging business conditions and achieved another profitable quarter,” says Ley Choon’s executive chairman and chief executive officer, Toh Choo Huat.
“We will continue our efforts in cost control especially in terms of fixed overhead expenses,” he adds.
Shares of Ley Choon closed 0.1 cent higher at 4.3 cents on Monday.
