Koh Brothers '08 net profit drops 30%

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Published February 26, 2009

Koh Brothers '08 net profit drops 30%

By UMA SHANKARI


CONSTRUCTION and property group Koh Brothers yesterday reported a 30 per cent fall in 2008 net profit to $27.7 million, from $39.7 million in 2007.

The decline was mainly due to the absence of any revaluation gain in 2008. In 2007, there was a revaluation gain of $39.3 million for investment properties. However, the absence of the revaluation gain was partly mitigated by a gain of $21.3 million from the sale of Changi Hotel in 2008.

The group also experienced a 24 per cent decline in revenue to $215.8 million - from $285.8 million in the previous corresponding period - mainly due to lower recognition of construction projects completed. Earnings per share were lower at 5.78 cents a share, compared to 8.28 cents a share in 2007.

The directors have recommended a special dividend of 0.1 cent per ordinary share and a final dividend of 0.2 cent per ordinary share. Last year, Koh Brothers paid out a first and final dividend of 0.3 cent a share.

Looking ahead, chief executive Francis Koh said that the company will continue to monitor the market for its real estate division, and launch projects on hand at the appropriate time. 'We are in the midst of a challenging period,' he said.

The company has the prime Lincoln Lodge site at Khiang Guan Avenue, off Newton Road in District 11, in its landbank. Koh Brothers acquired the site with Heeton Holdings, KSH Holdings and Lian Beng Group in June 2007 at the height of the property boom.

Mr Koh added he was confident that the company's contracts-in-hand of over $600 million from its construction and building materials segment would contribute positively to the group in FY2009 and the years ahead. Koh Brothers' stock closed at 13 cents on Feb 19, the last day shares were traded.