http://www.businesstimes.com.sg/arch...boost-20130205

Published February 05, 2013

Sim Lian Q2 profit up 35% on revenue boost

By Teo Si Jia


HIGHER group revenue and contributions from joint ventures boosted Sim Lian Group's bottom line for its fiscal second quarter.

The property development and construction group achieved a 35 per cent year-on-year surge in net profit to $47.51 million for the three months ended Dec 31, 2012, as turnover jumped 64 per cent to $208.28 million and share of results of joint ventures rose 136 per cent to $2.33 million.

The group results would have been better if not for an 89 per cent jump in contract costs to $148.2 million. "The increase in contract costs is in tandem with the increase in revenue, as well as due to higher labour and raw materials costs," said Sim Lian.

Its property development division raked in $170.1 million in the quarter - more than twice its contribution of $81.4 million previously - due largely to higher revenue from several development projects. But revenue contribution from its construction division fell 19 per cent to $31.7 million because of fewer projects.

Despite an overall better performance in the quarter, its half-year net profit of $84.72 million was 39 per cent lower than its earnings of $137.82 million a year earlier.

For the quarter, earnings per share (EPS) was 5.1 cents, up from 4.1 cents a year ago, while half-year EPS was 9.1 cents, down from 16.1 cents. Net asset value per share crept higher to 77.3 cents as at end-December, from 76.1 cents at end-June.

The first six months ended Dec 31 saw revenue up 2 per cent at $398.70 million.

Sim Lian said the latest property cooling measures were "the most severe and most encompassing from the government to date".

It added that it will continue to purchase land and acquire investment properties for recurring income.

The group expects profitable operating results for the full fiscal year of 2013 but said there may be greater fluctuations in its future earnings due to the revenue recognition methods of ongoing projects.

Sim Lian shares climbed four cents in trading yesterday to close at 87 cents.