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Published December 14, 2010

Low Keng Huat Q3 net profit dips to $15.2m

Revenue drops 70% to $61.5m, largely due to completion of projects

By FELDA CHAY


LOW Keng Huat has posted a 9 per cent fall in third- quarter net profit as construction revenue took a dive.

The construction group said that earnings for the three months ended Oct 31 dropped to $15.2 million, or 2.05 cents a share, from $16.6 million, or 2.25 cents a share.

Group revenue plunged 70 per cent to $61.5 million from $205 million for the year-ago period.

'We remain cautious and will continue our efforts to search for new projects and businesses that will generate consistent revenue and profitability streams,' said Low Keng Huat.

During the quarter, the group won the tender for a HDB land parcel at Upper Serangoon Road for $155.2 million, to build about 630 apartment units under the Design, Build and Sell Scheme. It also secured a $62.5 million contract to renovate an office building at 6 Battery Road.

Construction revenue for the August-October period fell 74.7 per cent year on year to $48.6 million. This was due to the completion of the group's projects at Meritus Mandarin Hotel and Hard Rock Hotel at Sentosa.

This, in turn, pulled down the group's nine-month turnover by 48 per cent to $233.2 million. Still, earnings for the nine months were still 31 per cent up at $62.6 million. The group attributed this to 'increased contributions from construction project nex at Serangoon Central Mall and decrease in accruals in completed projects, Meritus Mandarin Hotel and Hard Rock Hotel at Sentosa'.

For its development segment, contributions from associated companies and joint ventures fell 7.4 per cent to $22.4 million for the nine months.

This was mainly due to decreased contributions from one-north Residence and South Bank which obtained temporary occupation permit in July 2009 and April 2010 respectively, said the group.

Yesterday, Low Keng Huat shares closed half a cent higher at 46 cents. The group's net asset value per share stood at 43 cents as at Oct 31, up from 36 cents a year earlier.