570_M-SpaceProperty development will boost Lian Beng's revenue in the current quarter, upon TOP of its 55%-owned industrial property project, M-Space @ Mandai Estate.

LIAN BENG GROUP recently announced that its 1HFY2014 (Jun to Nov 2013) revenue was up 39.6% year-on-year at S$328.1 million, but net profit was down 3.8% at S$19.0 million, mainly due to higher marketing costs incurred by its property projects.

The following ate into profit attributable to shareholders:

1) Distribution expenses increased to S$4.9 million, more than threefold that of the S$1.4 million incurred in 1H2013.  This was mainly due to selling and marketing expenses from the sale of the Spottiswoode Suites and The Midtown Residences.

OngPangAik_agm12Ong Pang Aik, chairman and CEO of Liang Beng Group.
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2) Share of losses from associates was S$2.6 million.  This arose mainly due from selling and marketing expenses on NEWest, KAP Residences and Eco-Tech@Sunview.

The good news is: Property development will boost revenue in the current quarter (3QFY2014) when most of the revenue from its 55%-owned industrial property project, M-Space @ Mandai Estate, will be recognized (upon receipt of TOP).

The M-Space project was co-developed with Centurion Corporation and fully sold last year. 

Revenue up across all segments

Group revenue was up across all business segments, namely construction, property development and ready-mix concrete.

Revenue for the construction segment increased 29.1% to about S$223 million, representing 68% of the Group’s revenue.

The projects that contributed to the growth included Spottiswoode Park, Hedges Park, Goodwood Residence, Waterfront Isle and others.

LBH_construction_projects1.14Some projects on Lian Beng's construction order book.

Sales from the Group’s ready-mix concrete segment increased 9.3% to S$57.8 million, and contributed 18% to Group revenue.

Sales of the Group’s property projects jumped fourfold and increased to S$39.2 million.  Property projects contributed 12% to Group revenue.

This increase was mainly attributable to higher revenue recognized from the Group’s property projects, including Lincoln Suites and Midtown Residences.

Gross profit rose 34.9% to S$41.3 million for 1HFY2014, albeit at a lower gross margin partly due to the lower gross margins of the construction projects in the period and a different revenue mix.

Other operating income decreased from S$6.1 million to S$2.3 million due to the decrease in dividend income received offset by a write-back of impairment loss on unquoted investment securities in 1HFY2013.

The Group’s construction order book stood at S$1.0 billion as at 30 November 2013, significantly higher than the S$547 million in 1H2013.

LBH_order_book_1.14Lian Beng's order book of S$1 billion as at 30 Nov 2013 indicates what its construction revenue will look like two years later.

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