Tiong Seng Holdings' latest commentary -- as contained in its 2Q2019 results announcement -- on the outlook of the construction industry does look positive: While industry observers expect a slowdown in the medium term due to a poorer economic outlook, the stronger performance currently witnessed in the buildings sector is likely to lift the construction industry in the short-term. In addition, Singapore’s largest road project – the North-South Corridor – is set to begin by end-2019 and is poised to boost the construction sector’s short-term prospects further. In the longer term, the infrastructure sector should act as a cushion to the cyclical slowdown in the buildings sector. This is supported by Singapore’s large pipeline of megaprojects including the Changi Airport Terminal 5 and North-South Corridor Expressway projects which will start construction over the next few years. As at 30 June 2019, the Group’s order book stands at approximately S$627.6 million, expected to extend till year 2023. |
Notwithstanding a slower 1H2019, Tiong Seng Holdings continued to generate positive operating cash flows of S$25.2 million (1H2018: negative $49.7 million).
The Group held $45.3 million in cash as at end-June 2019.
S$’m |
1H2019 |
1H2018 |
Change |
Revenue |
169.8 |
196.7 |
(13.7) |
Net profit attributable to shareholders |
|
|
|
The group said revenue decreased 13.7% year-on-year to S$169.8 million for 1H2019, due mainly to a decrease in work performed for the construction segment and lower revenue recognised for its property development segment.
As a result of an aggressively competitive pricing market, margins from the newer construction projects secured were narrower, translating to a 3.0 percentage point decrease in gross profit margin to 9.9% for 1H2019.
Overall, net profit attributable to shareholders declined 54.8% yoy to S$2.7 million for 1H2019.
At 22 cents, Tiong Seng stock trades at 0.37 of its net asset value of 59.80 cents/share.
![]() -- Mr Pek Lian Guan (photo), CEO of Tiong Seng Holdings |
Full 1H2019 financial results here.