Koh Brothers reports 4Q18 net profit dropped 82 percent

Singapore two-dollar bills

Koh Brothers reported on Monday net profit for the fourth quarter dropped 82 percent on-year to S$2.19 million amid a lower profit margin from the construction and building materials division.

The absence of a year-ago writeback of S$4.63 million for the impairment of a loan to joint ventures also dented profit for the quarter, the construction and property development company said.

Sales for the quarter ended 31 December were nearly flat at S$131.50 million, down from S$131.90 million in the year-ago quarter, due to declines from the construction and building materials division, it said in a filing to SGX on Monday.

For the full year, net profit fell 68 percent on-year to S$6.61 million on sales of S$403.65 million, which was nearly flat on-year, Koh Brothers said.

Francis Koh, managing director and CEO, said that the company’s geographical diversification was paying off, with profit recognition beginning from its Nonhyeon I’PARK mixed-development project in Seoul.

“At the same time, we are focused on launching three freehold developments in the prime Holland Village district this year where we see good potential,” he said.

In the wake of Urban Redevelopment Authority (URA) data showing a slight decline in property prices in the fourth quarter, Koh said, “we will monitor the market closely to time our launches in Singapore prudently.”

Koh Brothers proposed a final dividend of 0.40 Singapore cent a share, compared with a final dividend of 0.60 Singapore cent and a special dividend of 0.40 Singapore cent a year earlier.

In its outlook, the company noted Singapore’s Building and Construction Authority (BCA) has projected the total value of construction contracts this year will be between S$27.0 billion and S$32.0 billion, with public sector projects at around 60 percent of the total.

Koh Brothers said it has secured some of the landmark projects, including the Circle Line 6-related works from Prince Edward station to Marina Bay station, the design and construction of phase two of the DTSS and the Woodlands Health Campus project from the Ministry of Health.

Those have added to its construction orderbook of S$682.8 million as of end-December, it said.

Get the Shenton Wire morning briefing in your inbox