Sim Lian net profit up a third to $44m

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Published August 28, 2008

Sim Lian net profit up a third to $44m

By JAMIE LEE


PROPERTY and construction group Sim Lian has posted a 33 per cent jump in fiscal full-year net profit to $44.1 million despite rising raw materials costs, thanks to higher revenue, a reversed impairment loss and a divestment.

Sim Lian also plans to launch three projects in fiscal 2009 at Surrey Road, Keng Lee Road and its second design, build and sell scheme project at Simei Road, it said in its financial statement, but added that they are not expected to contribute significantly to 2009 financials.

The company declared a first and final cash dividend of 1.6 cents per share.

Revenue rose 22 per cent to $389.6 million for the 12 months ended June 30, 2008. Property development sales were up 20 per cent to $250.4 million due mainly to revenue recognised from its projects, The Premiere @ Tampines and Carabelle.

Other operating income rose 92 per cent to $5.2 million due mainly to the divestment of its data centre.

Sim Lian's construction division posted a 22 per cent rise in revenue to $116.7 million, thanks to higher-value contracts clinched this year as well as a higher percentage of project completion.

Earnings per share rose to 7.8 cents from 6.3 cents, while its cashflow fell 33 per cent to $53.3 million.

The cost of raw materials and consumables jumped 56 per cent to $13 million, mainly due to pricier industrial lubricants.

The company also posted a negative balance of $258,000 in other operating expenses, thanks to a $6 million increase in valuation of its investment property and a $2.2 million reversal of impairment loss on property, plant and equipment. Stripping that out, other operating expenses would have jumped 58 per cent to $7.9 million due to a higher exchange loss recorded by its Malaysian subsidiary and in allowance for doubtful trade receivables.

Projects including The Premiere @ Tampines and Carabelle, as well as Clover by the Park at Bishan and The Amery at Telok Kurau - which were launched in June - are expected to contribute positively to the company's performance in fiscal 2009, said Sim Lian.

Despite rising construction costs and weak sentiment in the property sector, the company expects to achieve profitable operating results in fiscal 2009.