Developer and builder Sim Lian Group says it recorded a net profit of $31.3 million in 2QFY2010, 220% higher than the $9.8 million recorded in 2QFY2009. The significant increase is mainly due to an increase in revenue of $5.4 million, decrease in contract costs by $10.7 million, as well as reversal of foreseeable loss of $3.1 million in 2QFY2010.

Revenue from property development division contributed $125.4 million to the group’s revenue in 2QFY2010 compared to $106.9 million in 2QFY2009, an increase of 17%. The increase in revenue from property development division was mainly due to percentage recognition of revenue from the following projects: Clover By The Park, Parc Lumiere, The Lincoln Residences and Rochelle At Newton. This increase was partially offset by the decrease in revenue contribution from the projects The Premiere @ Tampines and Carabelle, which obtained TOP in December 2008 and July 2009 respectively.

Revenue from external projects of the construction division contributed $35 million to the group’s revenue, a decrease of 28% from the $48.8 million in 2QFY2009. The decrease in revenue from external projects was mainly because Bosch and Vertex at Ubi Avenue 3 obtained TOP in October 2009 and May 2009 respectively.

Contract costs were $127.6 million in 2QFY2010, a decrease of 8% from $138.3 million in 2QFY2009. The decrease was mainly due to revision of contract costs for development projects, as well as finalisation of sub-contractor accounts for completed construction projects.

Finance cost decreased by 97% mainly due to certain loan interest did not qualify for capitalisation in development properties and thus were expensed off in accordance with financial reporting standard in 2QFY2009. In 2QFY2010, such loan interest qualified for capitalisation and were thus capitalised in development properties.