Koh Brothers posts 49% rise in FY17 earnings to $19.8 mil on higher sales

SINGAPORE (Feb 13): Koh Brothers Group announced 4Q earnings of $12.2 million, representing a 74% growth in earnings from $7 million a year ago. This brings the group’s earnings for the full year of FY17 to $19.8 million, up 49% from $13.3 million in FY16 on higher sales and share of profit of joint ventures.

Overall, FY17 sales grew 7% to $369.4 million compared to $345 million for FY16, primarily due to higher contributions from the construction and building materials division.

Gross profit however declined by 50% to $14.5 million from $29.1 million previously due to lower gross profit margin.

Notably, share of profit of joint ventures grew 3% to $13.6 million from $13 million in FY16 on the completion of the group’s EC project Westwood Residences, as well as gains from the bulk sale of The Lumos.

Other income for the full year trebled to $10.5 million from $3.2 million in FY16 due to compensation income for early termination of a land lease, while other gains grew to $10.9 million from just $1.01 million a year ago, mainly due to gain on disposal of a joint venture (JV).

In all, earnings per share (EPS) of the group grew to 4.80 cents in FY17 from 3.21 cents in FY16.

Citing the latest statistics and forecasts from the Ministry of Trade and Industry (MTI), Building and Construction Authority (BCA) and the Urban Redevelopment Authority (URA), the group says it remains cautiously optimistic of the outlook for the private residential market, and will continue to pursue acquisitions as and when opportunities arise.

The group has proposed a final and special dividend of 0.6 cent and 0.4 cent, respectively.

“Over the last five decades, our construction arm has built a strong brand and track record, having a part to play in Singapore’s landmark civil engineering projects. With our requisite track record, BCA A1 grade, strong balance sheet and our reputation for delivering quality products safely and promptly, we are optimistic on the growth of our construction business,” says Francis Koh, managing director and group CEO of Koh Brothers.