Civil engineering company Hock Lian Seng has reported earnings of $20.4 million for the 1HFY2024 ended June 30, 128.7% higher y-o-y or more than double its earnings of $8.9 million in the corresponding period the year before.
While revenue fell by 6% y-o-y to $99.8 million, the company’s gross profit more than quadrupled to $21.3 million from $6.8 million in the 1HFY2023. The revenue decline was attributed to the lower revenue for Hock Lian Seng’s civil engineering segment and offset by the high turnover from its property development segment.
Gross profit surged due to growth from both segments. The higher gross profit from the company’s civil engineering arm was mainly due to the finalisation of account with subcontractors as the joint venture (JV) project with Changi Airport Group (CAG) nears completion. In addition, higher revenue and favourable selling prices for the company’s units at Shine@Tuas South saw an added $7.5 million gross profit for the property development segment. Shine@Tuas South is an industrial property at 11 Tuas South Link 1.
As at June 30, cash and cash equivalents stood at $156.1 million, up from $129.5 million as at June 30, 2023.
As at the same period, the company’s civil engineering order book stood at $624 million. This includes the projects for the future Aviation Park MRT Station on the Cross Island Line and the future Serangoon North MRT station also on the Cross Island Line. The JV project with CAG is expected to be completed by the 3Q2024.
Meanwhile, Shine@Tuas South has sold about 50% of its units and leased 46% of its total units to date. According to Hock Lian Seng, the interest for industrial building units has picked up since early 2023.
See also: PropertyGuru's net loss in 2QFY2024 surges to $16.1 million
“The outlook of construction industry remains challenging on the back of competitive environment, labour shortage, rising material and labour cost. The management will continue to tender for infrastructure projects competitively and explore other business opportunities to enhance the shareholders’ value,” says the company in its financial statements on Aug 7.
Shares in Hock Lian Seng closed 1 cent higher or 3.45% up at 30 cents on Aug 7.
