BBR Holdings' gains jump 26.8% to $9m

As margins surged across all segments.

According to a release, 3Q12 Group revenue was $46.0 million compared to $84.4 million in 3Q11, with net profit attributable to owners of the parent at $2.4 million in the current period, compared to $3.2 million in the previous corresponding period.

Group revenue in 3Q12 was lower due mainly to decreased revenue recognised from general construction projects and property development. Revenue from general construction division was higher in 3Q11 because a number of projects were in their active stage of construction last year, three of which had been completed in early 2012, resulting in lower revenue for the current quarter.

Lush on Holland Hill, a property development project that was fully sold, was granted Temporary Occupation Permit (TOP) and revenue from this project was fully recognised as at 30 June 2012.

Gross profit increased to $9.0 million in 3Q12 from $7.1 million in 3Q11, with improved gross margins of 19.5% in the current quarter compared with 8.4% in 3Q11. Margins were higher across all business segments in 3Q12 while those recorded in the previous corresponding quarter were mainly affected by lower margins from general construction activities.

Other operating income for 3Q12 decreased to $0.2 million from $0.3 million in 3Q11 due to lower gains on asset disposal and equipment rental to a subcontractor for execution of the Group’s project.

Other expense/income comprises foreign exchange loss or gains. In 3Q12, a marginal foreign exchange loss was incurred compared to $1.3 million foreign exchange gain in 3Q11. The latter was due to recognition of foreign currency translation reserves to the Income Statement upon closure of the Group’s overseas branches in 2011.

Administrative costs for 3Q12 rose to $2.1 million from $1.4 million in 3Q11 mainly due to advertising and sales commission expenses for its property development at Bliss@Kovan. Other operating costs increased by $0.8 million from $3.1 million in 3Q11 to $3.9 million in 3Q12, due largely to significantly higher provision for doubtful receivables (net).

Finance costs decreased to $154,000 in 3Q12 from $556,000 in 3Q11 because term loan interest for purchase of land for development of Bliss@Kovan were capitalised to development properties as from 1 August 2012 when construction commenced.

Finance cost was also higher in 3Q11 due to interest-rate derivative cost comprising interest expense less fair value gain adjustment for a derivative instrument which expired in March 2012.

Income tax expense in 3Q12 increased to $0.6 million from $0.4 million in 3Q11 as a result of higher tax provided in the current quarter after adjusting for non-deductible provision for doubtful receivables.