Chip Eng Seng reports 2Q19 net profit dropped 67 percent

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Chip Eng Seng reported Thursday its second quarter net profit dropped 67.4 percent on-year to S$3.99 million on lower revenue from the property development and construction divisions.

That was partially offset by new contributions from the education division and a higher contribution from the hospitality division, Chip Eng Seng said.

Revenue for the quarter ended 30 June fell 7.2 percent on-year to S$237.38 million, the property developer said in a filing to SGX.

Property development revenue dropped 9.9 percent on-year to S$169.8 million in the quarter due to the completion of Williamsons Estate and High Park Residences in the second quarter of 2018 and the first quarter of this year, respectively, the filing said. The decline was partially offset by higher contributions from Grandeur Park Residences and Park Colonial, the filing said.

Construction revenue for the quarter fell 10.3 percent on-year to S$44.8 million, mainly on lower revenue recognized from Tampines N6C1A/1B and Woodlands N1C26 & N1C27 which were completed in the second half of 2018. The decline was partly offset by revenue recognition from the two Bidadari projects and Sengkang N4C39 & C40, which are under construction, the company said.

In the hospitality division, revenue rose 14.5 percent on-year to S$17.6 million on improvements from the Grand Park Kodhipparu Resort in the Maldives, although that was partly offset by lower occupancy at the Australia hotels, Chip Eng Seng said.

The education division reported revenue of S$3.36 million for the quarter, with no year-earlier contribution, the filing said.

Administrative expenses in the quarter increased 24.5 percent on-year to S$21.9 million with the inclusion of new education division and a foreign-exchange loss on the weaker Australian dollar, the filing said.

For the first half, Chip Eng Seng reported net profit fell 17 percent on-year to S$15.24 million on revenue of S$504.65 million, up 10.9 percent on-year.

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