Chip Eng Seng reports 1Q19 net profit jumped 84 percent on higher development revenue

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Chip Eng Seng reported Monday its first quarter net profit increased 83.8 percent on-year to S$11.25 million on higher property development revenue and lower tax expenses.

Revenue for the quarter ended 31 March rose 34.2 percent on-year to S$267.27 million, mainly on “robust” contributions from the property development and hospitality divisions, Chip Eng Seng said in a filing to SGX after the market close.

Property development revenue increased 48.9 percent on-year in the quarter to S$204.27 million on a higher percentage of completion of Grandeur Park Residences and Park Colonial, the filing said.

Revenue from hospitality increased 19.7 percent on-year to S$21.7 million in the quarter on the full-quarter contribution from the Mercure & Ibis Styles Grosvenor Hotel in Adelaide, South Australia, which was acquired in March 2018, the filing said.

However, revenue from construction fell 10.03 percent on-year to S$37.7 million, largely on lower revenue recognized from Tampines N6C1A/1B and Woodlands N1C26 & N1C27, which were completed in in 2018, the filing said.

Income tax expense dropped 71.5 percent on-year to S$1.17 million on a lower contribution from Australian entities, which are subject to higher tax rates, Chip Eng Seng said.

In addition, the company posted a year-earlier foreign exchange loss of S$4.89 million, compared with no loss in the first quarter of 2019 as the Australian dollar strengthened.

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