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Construction firms see insiders raising respective stakes as sector struggles

The Edge Singapore
The Edge Singapore • 3 min read
Construction firms see insiders raising respective stakes as sector struggles
Group CEO of Koh Brothers and executive chairman of Soilbuild Construction, see higher stakeholdings in respective building firms.
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When Singapore’s “circuit breaker” measures tripped in the earlier part of the year to break the cycle of Covid-19 transmission in the community, the local construction sector suffered after being ordered to halt building activities. This affected how much revenue they could book and hurt their bottom lines for the first half this year. Still, over the past couple of months, insiders of at least two local-listed construction companies are using the opportunity to scoop up shares.

On Oct 22, Francis Koh Keng Siang, managing director & group CEO of Koh Brothers Group, acquired 45,300 shares for $7,382.99, or an average of 16.3 cents each. He now holds a direct stake of some 30 million shares, or a stake of 7.28%, up from 7.26% earlier.

In addition, Koh, who joined the family business back in 1987, has a deemed interest of 60 million shares, or a 14.55% stake. In total, he owns or controls about 90 million shares or 21.83% of the company. A day earlier on Oct 21, he had acquired 100 shares, paying 15.5 cents each. Even earlier on Sept 8 and 9, Koh had acquired 100 and 100,000 shares respectively at the same price.

Third quarter to be challenging too

On Aug 7, Koh Brothers reported revenue dropped 35% year-on-year to $104.1 million for 1H2020 ended June 30 from $161.3 million. He calls the pandemic “a great challenge and setback” to many sectors and expects that even with Phase Two reopening which allows the resumption of some activities, the business environment will still be “operationally challenging” and that the company still cannot resume worksite activities at a full swing.

As a result, Koh Brothers posted a net loss of $17.8 million for 1H2020 from earnings of $2.4 million in 1H2019. As at June 30, the company’s NAV per share stood at 69.13 cents, down from 73.17 cents as at Dec 31, 2019.

Husband and wife team

Leo Jee Lin, wife of Soilbuild Construction Group’s executive chairman Lim Chap Huat, has been steadily buying shares from the market. This comes after the company on Aug 11 reported wider y-o-y losses for the 1HFY2020 ended June 30.

Her first acquisition was for 169,300 shares on Sept 9 while her most recent purchase was for 86,000 shares on Oct 26. Leo now owns 2.2 million shares or 0.26% of the compa­ny. Her husband Lim also has a direct stake of 627.65 million shares or a stake of 74.61%. His total stake, consisting of both direct and deemed shares, is now 629.9 million shares or 74.87%.

On Aug 11, Soilbuild reported lower revenue of $69.2 million in 1HFY2020, down 37% from $109.9 million from a year earlier. The company attributes the drop to a decrease in construction activities during the half, in particular, since the start of the circuit breaker on April 7 where Soilbuild suspended all its construction and precast activities in Singapore.

As a result, losses for 1HFY2020 widened to $17.9 million from $1.8 million a year ago. As at June 30, the company’s NAV per share was 7.63 cents, down from 9.72 cents as at Dec 31, 2019.

But despite the challenging operating environment, Soilbuild was able to win two new construction contracts worth a total of $124.1 million during 1HFY2020. “However, the execution of construction works for these new projects are subject to the implementation and compliance of additional safety measures and policies,” the company cautions. As at June 30, its total book has hit $585.8 million, which comprises $533 million from construction projects and another $52.8 million from precast and prefabrication supply contracts.

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