http://www.businesstimes.com.sg/arch...rofit-20120829

Published August 29, 2012

Sim Lian posts 14% rise in FY12 net profit

By jasmine ng


SIM Lian Group's full-year net profit rose 14 per cent from last year's $200.1 million to $229.1 million, spurred by revenue growth, lower contract costs and better showings by its joint-venture projects.

Earnings came in at 25.8 cents per share for the 12 months ended June, compared with 23.5 cents a year ago. The property developer racked up a revenue of $764.3 million, 3 per cent higher from $744.7 million the year before.

Pre-tax profit shot up 13 per cent to a record $275.2 million. Revenue contribution from the group's property development division was 3 per cent lower than a year ago at $577.4 million.

This is due to weaker contributions from Parc Lumiere, which being a public housing project, was to be accounted for using the completion of construction (COC) method. This resulted in the entire revenue and expenses of the project being recognised in the last financial year.

However, revenue contribution from its industrial development, UB.One, has helped offset the revenue decline from Parc Lumiere.

Sim Lian's construction division contributed $158.3 million to its revenue, an increase of 27 per cent from the $124.3 million last year. The higher revenue contribution was attributed to a higher percentage of completion recorded in FY2012. The firm said that it incurred lower contract costs of $453.4 million, 5 per cent down from the $479.5 million incurred in the previous year, despite increasing labour costs and raw materials costs.

In FY2012, the group launched for sale three residential properties in Singapore: A Treasure Trove, Parc Vera and executive condominium The Tampines Trilliant.

Since launching, these properties experienced an uptick in demand with over 90 per cent of A Treasure Trove sold, over 85 per cent of Parc Vera and over 70 per cent of The Tampines Trilliant, Sim Lian said.

The group expects to achieve a set of profitable operating results for FY2013, but warns that there might be greater fluctuations to its future earnings as some of its ongoing projects are being accounted for using the COC method. For the full year, the board has declared a dividend of 7.5 cents per share, which comprises a first and final dividend of five cents and a special one-tier tax exempt dividend of 2.5 cents per ordinary share.

Shareholders may choose to receive new shares in lieu of the cash amount of their entitlements of Sim Lian's FY2012 dividends under the group's scrip dividend scheme. The counter closed half a cent higher at 70.5 cents yesterday.