Chip Eng Seng 4Q18 net profit more than doubled amid better development margins

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Chip Eng Seng reported on Friday its fourth quarter net profit rose 102.4 percent on-year to S$26.55 million amid better property development margins.

Revenue for the quarter ended 31 December rose 19.7 percent on-year to S$308.0 million, mainly on higher contributions from property development and hospitality, offsetting a decline in construction revenue, it said in a filing to SGX after the market close on Friday.

  • Property developments: Revenue rose 26.6 percent on-year in the quarter to S$245.5 million on progressive recognition from the High Park Residences, Grandeur Park Residences and Park Colonial projects, as well as the sale of a property site at Scarborough, Western Australia.
  • Construction: Revenue for the quarter fell 19.4 percent on-year to S$38.5 million, mainly on lower revenue recognition from the Tampines N6C1A/1B and Woodlands N1C26 & N1C27 projects, as they were reaching completion. That was partly offset by revenue recognized from the two Bidadari projects which were in their active stage of construction.
  • Hospitality: Revenue increased 45.6 percent on-year to S$$20.0 million in the quarter on contributions from the resort in the Maldives, Grand Park Kodhipparu Resort. The segment’s revenue was also boosted by contribution from two newly acquired hotels in Australia: The Sebel Mandurah and Mercure & Ibis Styles Grosvenor Hotel.
  • Property investments and others: Revenue rose 3.2 percent on-year to S$1.9 million in the quarter on rental income from investment properties acquired in 2018.

The income tax expense for the quarter fell 48.1 percent on-year to S$3.57 million as the company wrote back a tax provision from previous years and it benefited from previously unrecognized tax losses, it said.

For the full year, net profit rose 92.8 percent to S$63.12 million on revenue of S$1.08 billion, up 27.0 percent on-year, Chip Eng Seng said.

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