SINGAPORE (Feb 9): Lum Chang Holdings announce that its 2Q18 earnings has increased by 32% to $7.2 million compared to $5.5 million in 2Q17.
Revenue for the quarter was down 38% to $60.5 million from $97.0 million last year, mainly due to lower revenues from substantially completed construction projects and from an ongoing construction project, as well as lower revenues recognised by its Malaysian developments.
However, this was partially offset by revenue recognition of S$17.2 million from another construction project. No revenue was recognised for this project in the corresponding period last year as the construction progress then, had not yet reached the stage where revenue recognition could commence.
Consequently, cost of sales dropped 41% to $49.1 million from $83.2 million a year ago.
Hence, gross profit for 2Q18 stood at $11.5 million, 17% lower than $13.9 million recorded in 2Q17.
During the quarter, the group recorded a gain from distribution and marketing of $248,000 compared to a loss of $376,000 last year, due to selling expenses being reclassified to cost of sales for the completed and sold units and reclassified to other receivables for the uncompleted and sold units, for the group's development in Malaysia.
The group also posted share of profits of joint ventures of $4.37 million, compared to a loss of $18,000 a year ago, which mainly relates to the recognition of the group's proportionate share of revaluation gain on a leasehold property own by a joint venture company in Singapore.
The group’s total outstanding value of construction projects in progress is $625.2 million.
The group declared a cash interim dividend of 30 cents for the current quarter, which will paid out on March 12.
Looking forward, the Building and Construction Authority (BCA) expects up to $31 billion contracts to be awarded this year, due to an expected increase in public sector construction projects, which is anticipated to make up 60% of total projected demand.
Shares in Lum Chang closed at 37 cents on Friday.
