SINGAPORE (July 30): Local construction group Lian Beng reported 4Q19 ended June earnings fell 69.5% to $16.7 million from $55 million in 4Q18.

This brings FY19 earnings to $30.8 million, 62.4% lower than $82.0 million reported in FY18.

However, had the new SFRS (I) not been adopted, group earnings for FY19 would have been $61.1 million, 12.9% higher than $54.4 million in FY18.

During the quarter, revenue came in 22.6% lower at $132.9 million from $150.4 million last year, mainly due to the absence of revenue recognised from the sale of development properties at 596 St Kilda Road in Melbourne, Australia in 4Q18, as well as lower revenue contribution from the group’s Property Development segment, as industrial project T-Space @ Tampines was substantially completed in 4Q18.

The decrease in revenue was partially offset by increase in revenue in Construction and Investment Holding segments.

However, cost of sales increased 18.4% to $112.8 million, bringing gross profit for the 4Q19 to $20.1 million, 63.5% lower than $55.1 million a year ago.

Other operating income declined 88.0% to $4.5 million from $37.2 million in the previous year, mainly due to the absence of a one-time gain on disposal of investment property at 50 Franklin Street, Melbourne, Australia that was recorded in 4Q18.

Distribution expenses dropped 85.8% y-o-y to $0.6 million, while administrative expenses fell 60.6% to $5.1 million and other operating expenses decreased 43.1% to $2.1 million.

Share of results of associates and joint ventures increased 44.3% to $4.2 million from $2.9 million last year, mainly due to increase in share of profit from a joint venture arising from its investment holding activities.

As at end June, the group’s cash and cash equivalents stood at $179.9 million.

The group has declared a final dividend of 1.25 cents per share, bringing total dividend paid out for FY19 to 2.25 cents, equivalent to that paid out for FY18.

Currently, the group’s order book stands at $1.4 billion, with a steady flow of activities through FY22.

On the outlook, Lian Beng says it is cautiously optimistic about the outlook of the construction sector in the months ahead. The group will continue to leverage its strong track record and proven expertise to tender for public and private sector projects.

In addition, the group expects to generate stable, recurring rental income from its portfolio of investment properties. It also expects to generate recurring income from its portfolio of investment securities comprising mostly corporate bonds.

Shares in Lian Beng closed at 52 cents on Tuesday.