Chip Eng Seng reports 40% rise in Q1 net profit to S$8m

Construction firm Chip Eng Seng has reported a 40 percent rise in first-quarter net profit to S$8 million.

Revenue rose 33 percent to about S$60 million, boosted mainly by its construction business. Chip Eng Seng’s revenue from construction projects jumped 74 percent to S$52.5 million in the first quarter.

But its other two divisions, property development and property investment, faired less well with revenues falling on-year in the first three months.

The group’s gearing ratio increased to 1.14 as at 31 March this year, compared to 0.53 as at 31 December last year.

This was due to additional bank borrowings taken to finance a property development project in Pasir Ris.

On its outlook, Chip Eng Seng said demand for private residential properties in Singapore had been affected by global uncertainties and credit crunch triggered by the US sub-prime crisis.

The company said it will continue to remain cautious with its investment in property development.

However, with continued increase in construction demand for the rest of 2008, the company expects its construction division to be busy with tenders and construction work.

Its outstanding order book for construction contracts as at 31 March stood at S$632 million, which will keep the the firm’s construction activities busy up to 2011.

Barring unforeseen circumstances, Chip Eng Seng said it remains positive about its prospects for 2008. – CNA/ms

Source : Channel NewsAsia -12 May 2008