SINGAPORE (May 4): Chip Eng Seng, the property developer and construction firm, reported 1Q earnings fell 30% to $6.06 million from $8.6 million a year ago.

Group revenue increased 22.3% to $204.3 million from $167.1 million, mainly driven by robust contribution from the Property Developments and Hospitality divisions although revenue from Construction Division was lower.

Revenue from Property Developments climbed 52.3% to $137.2 million in 1Q18 from $90.1 million in 1Q17 due to the progressive recognition of High Park Residences, Grandeur Park Residences and Williamsons Estate.

Revenue from Construction decreased 29.4% to $47.1 million in 1Q18 as new projects secured were not sufficient to replenish the construction order book.

Lower contribution from Tampines N6C1A/1B and Woodlands N1C26 & N1C27 led to a decline in construction revenue in 1Q18. This was however partially mitigated by contribution from the two Bidadari projects.

Revenue from Hospitality increased 147.4% to $18.1 million due to contribution from the group’s island resort in Maldives, Grand Park Kodhipparu Resort.

Overall topline was also boosted by improved occupancy at the group’s Singapore-based hotel, Park Hotel Alexandra and contribution from two newly acquired hotels in Australia, The Sebel Mandurah and Mercure & Ibis Styles Grosvenor Hotel.

Revenue from the Property Investments & Others division fell 36.9% to $1.8 million mainly attributed to the absence of contribution from 420 St Kilda Road in Melbourne, Australia which was divested in August 2017.

As cost of sales widened 18.7% to $159.7 million, gross profit rose 37.0% to $44.6 million, while profit before tax came in 2.8% higher on the back of lower takings from other income and higher administrative expenses.

In its outlook, Chip Eng Seng says the group will continue to look for opportunities to replenish its land bank in Singapore. In Australia, the group has decided to hold back the marketing programme for the South Melbourne project. The occupancy rates of its hotel properties are expected to remain stable. The occupancy rates of its investment properties in Singapore, Australia and New Zealand are also expected to remain stable.

Shares in Chip Eng Seng closed 1 cent lower at 93 cents on Friday.