Koh Brothers nine month profit up 38% to S$10.1mln

The group’s Construction and Building Materials division primary contributor to 14% increase in revenue behind upbeat economy and positive sentiments for the construction sector.

Koh Brothers Group Limited (“Koh Brothers”), a well-established construction, property development and specialist engineering solutions provider, on Thurdday announced a 38% jump in net profit attributable to shareholders (“Net Profit”) to S$10.1 million for the nine-month period ended September 30, 2010 (“9MFY2010”), compared to S$7.3 million in the previous corresponding period (“9MFY2009”). This was achieved on the back of a 14% increase in sales to S$265.0 million, primarily contributed by the Construction and Building Materials division.

Apart from higher revenue, profit was boosted by a reduction in total expenses due to lower finance and distribution expenses. Correspondingly, the Group’s profit before tax (“PBT”) rose by 56% to S$11.3 million in 9MFY2010 compared to S$7.3 million in the previous corresponding period.

Earnings per share improved to 2.10 cents for 9MFY2010, compared to 1.52 cents in 9MFY2009.

The Group maintained a healthy balance sheet with cash and bank balances of S$46.6 million as at September 30, 2010 compared to S$43.0 million as at December 31, 2009.

Said Mr Francis Koh, Managing Director and Group CEO of Koh Brothers: “Our resilience continues and we are glad to have achieved an increase in net profit for our shareholders for 9MFY2010, on the back of an improved revenue. Moving forward, in line with the upbeat economy and positive sentiments for the construction, property and hospitality segments, we are optimistic of good growth opportunities and will be selective in tendering for new projects. We will continue to monitor the market closely and continue with our efforts to control costs and improve productivity.”

Outlook
The latest forecast by The Ministry of Trade and Industry (“MTI”), showed that the Singapore economy is on track to achieve a growth of 13% to 15% for 2010.

The government recently introduced various property measures to maintain a stable and sustainable market. Although this has affected the residential property market, the Group believes that the general market sentiment is still positive and will monitor the market closely and release more residential units for sale at the appropriate time.
For the Construction and Building Materials division, the Group is encouraged by upcoming government projects such as Downtown Line 3. However, tender pricings are expected to be competitive.

The outlook of the hospitality division has improved. With an improved occupancy rate, the Group is cautiously optimistic that this trend will continue.