http://www.businesstimes.com.sg/comp...-housing-vibes

Chip Eng Seng flags better local housing vibes

Friday, February 17, 2017

by Cai Haoxiang
[email protected]
@HaoxiangCaiBT


CONSTRUCTION and property development group Chip Eng Seng flagged improved sentiment in the Singapore residential property market to explain why it was launching its latest condominium project.

"The results of new residential property launches in H2 2016 were more encouraging than H1 2016," it said. The firm will be "leveraging on this improved sentiment" for its latest 720-unit Grandeur Park Residences development in Tanah Merah, which goes on sale in early March.

It noted that its High Park Residences development in Sengkang is 99.4 per cent sold while its high-end development in Katong, called Fulcrum, is 43.8 per cent sold.

The firm reported a net profit of S$14.9 million for its fourth quarter ended Dec 31, 2016, 52.5 per cent higher than a year ago.

Higher profits were driven by a net fair value gain on investment properties. The firm also enjoyed lower administrative expenses due to a lower impairment loss on a development property, and the absence of a fair value loss on investment properties.

Revenue rose 62.5 per cent to S$250 million, driven by revenue recognition for High Park Residences. Construction revenue also rose due to Woodlands and Tampines building works projects.

For the full year of 2016, revenue was up 10.6 per cent to S$748 million compared with a year ago.

But cost of sales rose faster, hence gross profit fell 9.3 per cent to S$146.5 million.

Net profit for shareholders fell 43.3 per cent to S$35.7 million, in part due to much higher income tax expenses.

The firm added that Australia residential housing demand softened recently due to less availability of financing to foreign buyers combined with a stamp duty hike.

The group is thus reviewing its plan to launch its South Melbourne project in the first half of the year.

Construction segment order book was S$537.4 million at end-2016, down from S$628.8 million the preceding quarter.

A first and final dividend of four cents per share was declared, unchanged from a year ago.

Net asset value at end-2016 was S$1.23, up from S$1.21 a year ago.

The counter closed at S$0.71, up half a cent, before results were out.