SINGAPORE (Oct 14): Mainboard-listed construction firm Lian Beng Group saw its earnings rise 21.3% to $7.4 million for the 1Q20 ended August, from $6.1 million a year ago.

This translates to earnings per share (EPS) of 1.48 cents for 1Q20, compared to EPS of 1.22 cents in 1Q19.

The increase was mainly attributable to higher other operating income and lower distribution expenses.

Other operating income rose 60.5% to $3.8 million in 1Q20, from $2.2 million a year ago.

This was mainly due to interest income of $0.7 million from loans to associates.

Distribution expenses fell 80.1% to $0.4 million during the quarter, compared to expenses of $2.1 million a year ago.

This was mainly due to significantly lower marketing expenses with the substantial completion of T-Space @ Tampines by 1Q19.

1Q20 revenue jumped 74.5% to $146.8 million, from $84.1 million a year ago, on the back of higher revenue generated from the Construction Segment.

The higher contribution from the Construction Segment was due to the progressive revenue recognition of construction projects.

The increase in revenue was partially offset by lower revenue generated from the Property Development Segment, mainly due to an absence of revenue from the T-Space @ Tampines industrial project, which was substantially completed by 1Q19.

However, gross profit in 1Q20 fell 14.4% to $22.1 million, as cost of sales more than doubled to $124.7 million, outpacing the increase in revenue.

Lian Beng says the surge in cost of sales was in line with the increase in construction activity and the commencement of new projects.

As at end August, cash and cash equivalents stood at $191.7 million.

Looking ahead, Lian Beng says it is cautiously optimistic of the outlook of the construction industry in the year ahead, on the back of healthy demand for construction services from the public sector.

Lian Beng’s order book to date stood at $1.4 billion, which it says should support the group’s activities through FY23.

The group says it will continue to leverage its strong track record and expertise to tender actively for public and private sector projects.

Shares in Lian Beng closed 1 cent lower, or down 2.0%, at 48.5 cents on Monday, before the results announcement.