Strong property development earnings contribution such as from Midtown Residences (above) is boosting Lian Beng's bottom line by leaps and bounds. Internet picture
TOP LINE is not a good gauge of Lian Beng Group's strong financial position.
Its 1QFY2016 net profit attributable to shareholders surged by a whopping 169.5% year-on-year to reach S$32.3 million, thanks to exceptional sales contribution from its joint venture property development projects. The strong bottom liine growth was due to a 134.1% jump in pretax profit that came mainly from its joint ventures and investments in property development projects.
Even though these projects are core businesses that contributed as much as 82.5% to pretax profit, they are not reflected at the top line as the Group usually owns less than 50% in such ventures.
'We have a significant amount of revenue from property development projects in the pipeline for recognition over the next 2 years,' said Executive Director, Ong Lay Koon.
NextInsight file photoIts share of results from associates and joint ventures was up 465% at S$28.6 million, mainly on profits recognized from the following projects: NEWest (91% sold), KAP Residences (99% sold), The Midtown and Midtown Residences (97% sold).
The share of results from associates was also boosted by a one-off profit recognition from its industrial development project, Ecotech@Sunview, which received its TOP during the quarter.
On the other hand, revenue decreased 19.1% to S$135.6 million due to lower revenue from its construction segment.
Other 1QFY2016 highlights:
1. Strong cash reserves: S$220.2 million as at 31 August 2015.
2. Strong order book: S$452 million as at 31 August 2015
3. Share buyback: purchased 4,025,400 shares from the open market
Details of its financial results can be found here.
Recent developments
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1. Export of asphalt premix: commenced 3 months ago Construction of Lian Beng's second dormitory in JV with Centurion is expected to be completed in the middle of 2016. The new dormitory is located in Jalan Papan and will house workers in the petroleum and petrochemical industries. The facility is expected to be ready in mid-2016. The Group is testing out the property development market in the UK and in Australia with relatively small investments. |
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