LOW Keng Huat’s second-quarter net profit more than tripled, thanks to its booming construction segment and higher contributions from its gaming centre operations.
The property and hospitality group yesterday posted net profit rising 264 per cent to $20.1 million for the three months ended July 31, up from $5.5 million during the same period last year.
Group turnover for the second quarter increased 133 per cent to $161 million, mainly due to gains from construction.
The rise came despite lower contributions from the hotel and food and beverage (F&B) business.
Revenues from development and investment were not significant, the firm said yesterday. The group’s current investments are in properties located mainly in Singapore and Malaysia, as well as some quoted equity investments.
Construction revenue, the firm’s largest contributor by industry, was up 177.6 per cent to $150.2 million for the second quarter, compared with the three months last year.
It attributed construction’s good showing to the higher percentage of completions for on-going projects one-north Residences, South Bank and Hard Rock Hotel at Sentosa, Meritus Mandarin Hotel and commencement of new project Nex at Serangoon Central Mall.
The group’s construction business is conducted primarily in Singapore, but a single project in Beirut, Lebanon, was completed
in February 2007. Turnover for its hotel and F&B business dived 32.2 per
cent to $10.1 million.
The group’s two hotels – the Duxton Hotel Perth in Australia and Duxton Hotel Saigon in Vietnam – reported falling revenues due to lower room and occupancy rates.
While the electronic gaming centre licence held by Duxton Hotel Saigon was suspended in November by the Vietnamese government last year, the hotel is running as per normal.
Earnings per share rose to 2.72cents from 0.75 cents, while net asset value per share jumped to 32 cents, as at July 31, from 28 cents, as at Jan 31 this year.
Although there had been improvements in equities and Singapore property, the board was of the opinion that the economic environment was still uncertain.
‘Whether the improved economic environment can be sustained remains to be seen,’ it said.
The company will continue to focus on its core business and improve operational efficiency and cost management measures.
Its total order book currently stands at $830 million.
Its stock fell by half a cent to close at 37 cents
Source : Straits Times – 15 Sep 2009
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