Pek Lian Guan, CEO of Tiong Seng Holdings whose core strengths include advanced construction technologies.NextInsight file photo.Tiong Seng Holdings' 1Q results announcement pointed to a compression in gross margins for its construction business but its order book continues to be remain robust at S$1.17 billion, which is expected to extend till 2017.
The orderbook is one of the largest among Singapore contractors, and extends to 2017.
Excluding a one-off gain of S$8.1 million from the disposal of investment properties in 1Q2013, the Group’s profit from operating activities decreased by S$2.2 million to S$3.0 million in 1Q2014.
All told, net profit fell 85.5% to S$1.6 million from S$11.3 million in 1Q2013, mainly due to losses in the property development segment and lower profit in the rental segment
Tiong Seng said in its press release: "The construction sector remains challenging due to foreign competition and rising labour costs due to the manpower crunch.
"As such, we expect to see cost pressures for the year ahead. In order to effectively address the difficult industry operating conditions, the Group is leveraging on its core construction competencies in pre-cast construction technology, Cobiax and advanced formwork systems to improve productivity and reduce reliance on labour."
To diversify out of Singapore, Tiong Seng partnered IE Singapore in its Global Company Partnership Programme. The Group first announced its investment in a precast plant in Iskandar, Malaysia in June 2013 and has recently commenced operations in April 2014.
In addition, the Group’s third precast plant in Asia, a joint-venture with subsidiary of Myanmar’s construction giant Shwe Taung is also expected to commence operations in 3Q2014.
93 units totaling 21,030 sqm of the Equinox project in Tianjin have been sold but the revenue has yet to be recognised. Photo: CompanyYears earlier, Tiong Seng also had ventured into property development in China. Its three projects in China are Sunny International Project in Cangzhou,The Equinox in Tianjin and the Tranquility Residences in Suzhou.
"As such, we expect to see cost pressures for the year ahead. In order to effectively address the difficult industry operating conditions, the Group is leveraging on its core construction competencies in pre-cast construction technology, Cobiax and advanced formwork systems to improve productivity and reduce reliance on labour."
To diversify out of Singapore, Tiong Seng partnered IE Singapore in its Global Company Partnership Programme. The Group first announced its investment in a precast plant in Iskandar, Malaysia in June 2013 and has recently commenced operations in April 2014.
In addition, the Group’s third precast plant in Asia, a joint-venture with subsidiary of Myanmar’s construction giant Shwe Taung is also expected to commence operations in 3Q2014.
93 units totaling 21,030 sqm of the Equinox project in Tianjin have been sold but the revenue has yet to be recognised. Photo: CompanyYears earlier, Tiong Seng also had ventured into property development in China. Its three projects in China are Sunny International Project in Cangzhou,The Equinox in Tianjin and the Tranquility Residences in Suzhou. As at 31 March 2014, approximately S$66.6 million of gross development value comprising 1 unit totaling 141 sqm of Tianmen Jinwan Building, and 154 units totaling 14,913 sqm of Sunny International project, 93 units totaling 21,030 sqm of the Equinox, 5 units totaling 672 sqm of Tranquility Residences and 3 units totaling 183 sqm of Wenchang Baihui in Yangzhou have been sold.
However, the sale has yet to be recognised as revenue in accordance with the Group’s revenue recognition policy.
However, the sale has yet to be recognised as revenue in accordance with the Group’s revenue recognition policy.
"We expect to complete our projects within our property development business over the next two to four years and remain positive that this business segment will be our second engine of growth,” said CEO Pek Lian Guan.
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