LIAN BENG: 1QFY2017 gross profit up 21.7% at S$18.5 million

NEWest is Lian Beng's residential-cum-commercial project jointly developed with Oxley Holdings. (Artist's Impression) Lian Beng Group has reported a net profit of S$13.5 million for its first quarter ended 31 August 2016 (“1QFY2017”). 1QFY2017 revenue decreased 47.8% year-on-year to S$70.8 million mainly due to a decrease in revenue generated from the construction segment and ready-mixed concrete segment. Gross profit was up 21.7% y-o-y to S$18.5 million on higher profit recognition from the construction division. “Our financial position remains strong, providing us the financial muscles to seek out property development and investment opportunities locally and overseas, and to continue our business expansion through acquisition, joint venture and/or strategic alliances.” – Ong Pang Aik Executive Chairman Lian Beng Group (Photo by Sim Kih) While the Group recorded a 59.8% decrease in net profit of S$13.5 million for 1QFY2017, its balance sheet remained healthy with cash reserves of S$163.3 million as at 31 August 2016. Other operating expenses increased S$2.8 million to S$5.4 million in 1QFY2017 mainly due to increase in unrealised exchange loss and impairment loss on investment securities. Distribution expense increased S$1.0 million mainly due to increase in marketing expenses incurred for the launch of industrial property development, T-Space, located at Tampines North Drive 1. 1QFY2017 share of results of associates and joint ventures declined S$20.5 million to S$8.0 million mainly due to the completion of some property development projects such as NEWest and the Midtown and Midtown Residences in the last financial year. For more info, refer to its financial statements here.

The Group expects the construction industry to remain challenging and will continue to leverage on its track record and proven capability to tender for more projects.

The Group also expects its investment in the high yield bonds as well as investment properties to generate stable interest and rental incomes going forward. Its current and non-current investment securities amounted to S$97.4 million as at 31 August 2016.


Improved Governance
To introduce greater independence in corporate governance, Lian Beng Group reconstituted its Board of Directors with effect from 12 October 2016 as follows:

Executive Director Ong Lay Koon, being a member of the Ong family that holds a combined interest of more than 35% in the Group, stepped down from being a member of its Audit, Nominating, and Remuneration Committees. Mr Ang Chun Giap was appointed as  an Independent Director and replaced Ms Ong in the Audit, Nominating, and Remuneration Committees. Mr Ang is a director of Acevision Blast & Coat and an audit partner with JPL Wong & Co.

The latest Board changes increased the number of Independent Directors to three so as to better counter-balance the representation by the three Executive members (Ong Pang Aik, Ong Lay Huan, and Ong Lay Koon) who all come from the Ong family that holds the controlling shareholding interest.