SINGAPORE (Apr 12): Lian Beng Group announced earnings of $16.8 million for the nine months ended Feb 2018, down 20.6% from $21.2 million a year ago on lower revenue, higher costs and expenses, as well as lower results of associates and joint ventures.
Revenue for 9M fell 6.2% to $146.5 million from $156.2 million a year ago, largely due to lower contributions from the construction segment. This was offset in part by higher revenue from the investment holding and ready-mixed concrete segments.
Other operating income grew 65.9% to $17.1 million from $10.1 million previously due to a gain on disposal of investment properties at 247 and 249 Collins Street, Melbourne, Australia, by Lian Beng Ventures (Melbourne).
Distribution expenses grew 82% to $3.8 million in 9M18 from $2.1 million previously due to market and leasing agent’s fee in connection with the group’s disposal of its investment property at 50 Franklin Street.
See: Lian Beng sells third Melbourne property for $93.5 mil
Finance costs grew 58.3% to $10.8 million in 9M18 from $6.8 million a year ago, due to higher borrowings to finance the purchase of investment securities – in addition to interest costs incurred for investment properties in Australia and Singapore.
In all, the group recorded a lower share of results of associates and joint ventures of $10.2 million from $14.2 million in 9M17.
Over 3Q18, the group posted a 63% rise in earnings to $4.7 million from $2.9 million a year ago on higher revenue, which grew 62.5% to $58.8 million from $36.2 million in 3Q17.
As at end-Feb, Lian Beng says its net construction order book stands at $924 million, which it believes will provide a steady flow of activity through FY2022.
The group says it remains cautiously optimistic of the construction and property outlook for the next 12 months in light of positive forecasts by the Building and Construction Authority (BCA), and that it will continue to tender for construction projects leveraging on its track record and expertise, while exploring further investment projects.
Lian Beng on Wednesday announced the spin-off of its property development business, with the launch of its initial public offering (IPO) under SLB Development at 23 cents per share.
See: SLB launches IPO at 23 cents each to raise $54.7 mil
In the view of the group’s executive chairman Ong Pang Aik, the separate listing is one that will further create value for Lian Beng’s shareholders.
“The construction sector is cyclical and there are bound to be ups and downs over the years. We have grown stronger and are now able to ride through downturns as we have built a strong foundation and diversified our revenue streams. The local construction outlook is looking more positive. We are well-poised to ride the next wave,” says Ong.
Shares in Lian Beng closed 1 cent higher at 64 cents on Thursday.
