SINGAPORE (Jan 12): Lian Beng Group, the civil engineering firm and property developer, reported 1H18 earnings dropped 33.7% to $12.2 million compared to $18.4 million in 1H17.

The group’s revenue for the first half ended November declined by 27% to $87.6 million from $120 million a year ago, mainly due to the decrease in revenue generated from the construction segment.

Similarly, cost of sales was 24.9% lower at $68.1 million from $90.7 million last year.

Hence, gross profit for 1H18 stood at $19.5 million, 33.5% lower than $29.4 million recorded in 1H17.

Other operating income increased by 82.7% to $13.4 million compared to $7.31 million last year due to gain on disposal of the group’s investment property at 247 & 249 Collins Street, Melbourne, Australia by subsidiary Lian Beng Ventures (Melbourne).

Other operating expenses also decreased by more than half to $4 million from $8.77 million in the previous year.

Distribution expenses saw an increase of 74.5% to $2.9 million from $1.67 million a year ago, marketing and leasing agent's fee in connection with the investment property at 50 Franklin Street, Melbourne, Australia.

Finance costs also increased by 70.7% to $6.92 million compared to $4.05 million last year, attributed to increase in borrowings to finance the purchase of investment properties and investment securities.

Share of results of associates dropped by 52.4% to $3.34 million from $7.01 million in 1H17.

As at Nov 30, 2017, the group’s construction order book stood at $972 million.

The group has declared an interim cash dividend of 1 cent, which will be payable on Jan 30. 

Lian Beng says it intends to carry out the proposed spin-off and listing of its property development business. It will be convening an extraordinary general meeting to seek shareholders' approval in due course.

In light of positive indicators regarding Singapore's construction and property segments, the group is cautiously optimistic of the construction and property outlook for the next 12 months. The group will continue to tender for construction projects leveraging on its track record and expertise, and explore further property investment projects.

Shares in Lian Beng closed 1 cent higher at 76 cents on Friday.