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Published April 1, 2011

Low KH posts record profit, eyes more mass-market sites

By UMA SHANKARI


CONSTRUCTION and property group Low Keng Huat (Singapore) wants to buy more mass market residential sites as it looks to build up its property development business, managing director Low Keng Boon said yesterday.


The Minton: As at end-February, 521 units out of the 1,145 in total have been sold

The company in November 2010 bought a site at Upper Serangoon Road - offered for sale under the Design, Build and Sell Scheme (DBSS) by the government - marking the first time that Low Keng Huat has embarked on a property development project without any partners.

Low Keng Huat has been partnering UOL Group and Kheng Leong, a privately owned property group controlled by Wee Cho Yaw, to build projects for about a decade now.

Right now, Low Keng Huat and Kheng Leong are jointly developing The Minton in Lorong Ah Soo. As at end-February 2011, 521 units out of the 1,145 in total have been sold. Units were sold at a median price of $848 per square foot (psf) in February.

'This is the first time that we have ventured out by ourselves,' said Mr Low, who was speaking to reporters on the company's financial results. 'We have to grow, and we have built up our cash to be in a good position to venture out on our own.'

The Upper Serangoon Road DBSS site could be launched by the end of this year. More bids for DBSS and executive condominium sites, and even plots for private residential projects are likely, Mr Low added.

Yesterday, the group reported a net profit of $19.1 million for the three months ended Jan 31, 2011, up 27 per cent from the previous year. Revenue, however, fell 73 per cent to $39 million as the group completed construction of several major projects.

Earnings per share for the group's Q4 2010 accounting period rose to 2.59 cents from 2.04 cents for the previous corresponding quarter.

For the full year ended Jan 31, 2011, Low Keng Huat's net profit rose 30 per cent to a record $81.7 million. Revenue declined by 54 per cent to $272.2 million. The revenue fall was mainly due to the decrease in construction activity.

The group's construction business accounted for the bulk of its revenue.

The proportion of revenue contributed by property development will grow over the next few years, Mr Low said.

The group will pay out a dividend of four cents per ordinary share, comprising a first and final dividend of three cents a share and a special dividend of one cent a share.

Looking ahead, Low Keng Huat said that it would continue to search for new projects and businesses that generate consistent revenue and profits. But it will also remain vigilant and cautious in its cost control and land tendering activities.

Low Keng Huat shares gained half a cent to close at 45.5 cents yesterday.