Chip Eng Seng’s Q2 net profit falls

Construction and property group Chip Eng Seng reported on Thursday a year-on-year decrease of 14.2 per cent in its net profit for its second quarter to S$17.7 million.

This is down from S$20.7 million recorded during the same period last year.

The group also registered a 31.1 per cent decline in its second quarter revenue to SS$86 million compared to S$125 million a year ago.

Its property development division derived revenue contribution from the progressive recognition of revenue from [email protected] and My Manhattan.

Share of losses in the results of associates were attributed to the group’s interest in two joint-venture development projects, namely Belysa and Privé. These losses were mainly due to the marketing and selling expenses incurred.

Chip Eng Seng also highlighted the absence of share of profits from The Parc Condominium, CityVista Residences and Grange Infinite, all of which have obtained Temporary Occupation Permits (TOPs).

Its construction division registered a decrease in revenue by 46.4 per cent to $45.0 million for Q2, 2011 due to the absence of contributions from The Parc Condominium and CityVista Residences as these projects were completed in 3Q2010.

The absence of contributions from Grange Infinite, which was completed in 1Q2011, also contributed to the decrease.

Going forward, Chip Eng Seng’s executive chairman Lim Tiam Seng said the company will be monitoring developments in the local property market closely in view of growing uncertainty in the global economy and financial markets.

“We are still optimistic about the longer prospects for Singapore residential properties, especially in the suburban areas,” he said.

“Our construction arm, with its track record and experience, is also well positioned to benefit from the ramp-up in building of BTO flats. We are actively participating in tenders for such projects,” he added.

Source : Channel NewsAsia – 12 Aug 2011