SINGAPORE (May 13): Tiong Seng Holdings announced that its 1Q19 earnings have dropped by 73% to $1.3 million, compared to $4.9 million in 1Q18.

Total revenue for the period dropped 37% to $89.3 million from $140.8 million a year ago, this was mainly due to lower revenue contributions from all of the group’s business segments – construction contracts, sales of development properties and rental income.

Construction revenue dropped 38% y-o-y, mainly due to differences in stages of various construction contracts and the net decrease in work done for various projects, as old ones got completed and contributions from new ones not being significant in contrast.

Revenue from sales and development properties dropped 14% y-o-y, mainly from the sale recognition of 5 units (1,151 sqm) from Equinox Project and 4 units (1,322 sqm) from Tranquility Project. In 1Q18, revenue amounted to $8.4 million, which was mainly derived from the sale recognition of 7 units (2,038 sqm) from Equinox Project and 3 unit (900 sqm) from Tranquility Project.

Other income also declined by 45% to $0.8 million from $1.5 million last year, mainly due to recognition of gain on disposal of plant and equipment in 1Q18 and lower miscellaneous income from construction segment.

Total costs and expenses fell by 37% to $86.3 million compared to $136.2 million in the previous year.

As at end-March, the group’s cash and cash equivalents stood at $58.1 million.

Pek Lian Guan, CEO of Tiong Seng says, “Faced with an increasingly competitive construction landscape, we acknowledge the need to balance between offering competitive prices and maintaining our profit margins to ensure earnings resiliency. In a bid to differentiate ourselves from industry peers and improve project hit rate, we choose to adopt a competitive pricing strategy and tap on our extensive range of construction solutions to create value-add for our customers. Apart from growing our order book, we will continue to engage in value engineering and cost optimisation to enhance the profitability of our projects.”

Shares in Tiong Seng closed at 24 cents on Monday.

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