SINGAPORE (May 14): Lee Metal Group reported a 32% rise to 1Q18 earnings ended March to $2.9 million from $2.2 million a year ago.

For 1Q18, group turnover increased 23.4% to $100.4 million from $81.4 million in the corresponding quarter last year.

The higher turnover was attributable to Property Development and Investment business which contributed $21 million, but partially offset by Fabrication & Manufacturing business which decreased $2 million.

The group completed its sale of a newly redeveloped bungalow in January for its Property Development and Investment business.

Although the decrease in turnover for its Fabrication and Manufacturing business was due to lower tonnage delivered, this was partially offset by higher steel prices.

The group's gross profit margins as a percentage of turnover in 1Q18 was 14.4%, lower than the corresponding period last year of 19.6%. This was mainly due to lower margins derived from most of the products in the Fabrication & Manufacturing business.

In line with the decrease in tonnages delivered in the Fabrication & Manufacturing business, lower costs were incurred for insurance, freight and transportation, repair and maintenance and other operating expenses. However, higher costs were incurred for rental and financial expenses due to higher stockholding.

Share of loss of associate decreased 62.5% to $6 million due to lower overheads incurred.

Lee Metal says although the rate of contraction in Singapore’s construction sector has eased, margins are expected to remain under pressure due to excess capacity and continuous intense competition among the industry players.

Shares in Lee Metal closed 0.5 cent lower at 42 cents.