BT : Chip Eng Seng posts 56% rise in Q2 profit

Business Times - 14 Aug 2010

Chip Eng Seng posts 56% rise in Q2 profit

By UMA SHANKARI

CONSTRUCTION and property group Chip Eng Seng Corp yesterday reported a 56 per cent climb in Q2 net profit, boosted mainly by property sales as well as higher construction activity.

Net profit for the three months ended June 30 rose to $22.4 million from $14.4 million a year ago. This came on the back of an 84 per cent climb in group revenue to $125 million from $68.1 million last year.

Revenue from the property development segment surged sevenfold to $40.5 million, accounting for almost a third of group revenue in Q2. This was mainly from sales of Chip Eng Seng's 100 per cent-owned development project Oasis@Elias, which was launched in the second half of 2009. As at June 30, 66 per cent of the project had been sold.

Revenue from construction activities also jumped 35 per cent to $84.1 million due to revenue recognition from ongoing developments such as The Parc Condominium, City Vista Residences, Grange Infinite as well as HDB projects.

Earnings per share rose to 3.4 cents in Q2 2010 from 2.18 cents last year.

For the first six months of 2010, net profit rose 76 per cent to $47.2 million from $26.8 million a year ago. Group revenue jumped 53 per cent to $225 million from $147.1 million.

Chip Eng Seng executive chairman Lim Tiam Seng said that the company will continue to benefit from the sustained recovery in the Singapore property market which has resulted in higher sales volume and prices at its projects. It has been actively replenishing its land bank in the past half-year, both locally and overseas.

The group also said it has obtained the temporary occupation permit (TOP) for its 50 per cent joint-venture project, The Parc Condominium. City Vista Residences, another 50 per cent joint-venture project, is expected to obtain its TOP in the coming months. City Vista Residences will be relaunched in the coming months.

As for its construction arm, Chip Eng Seng is expanding its precast division and also looking at ways to incorporate environmental protection practices into its business. The group's outstanding order book for its construction contracts stood at $233 million at end-June.

Chip Eng Seng shares gained half a cent to close at 35.5 cents yesterday.

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