KSH Holdings net profit jumps 24.1% to S$12.3m

Led by property development and construction segments.

KSH Holdings Limited announced that its earnings jumped to S$12.3m for the second quarter ended September 30, 2013 (2QFY2014), from S$9.9m in the previous corresponding period (2QFY2013). This was achieved mainly on the back of an increase in Group revenue and a surge in share of results in associates, the firm said in a release.

Commented Mr Choo Chee Onn, Executive Chairman and Managing Director of KSH Holdings: "Building on the momentum achieved in the previous quarter, KSH has delivered another quarter of growth in 2QFY2014, as both our Construction and Property Development business segments have performed well in the period under review. Notably, the Group won a S$98.9m contract to construct a mixed-use development this period. We are also pleased that the joint-venture property development projects that the Group has launched have met or exceeded the Group's expecttations in terms of sales volume and selling prices."

In 2QFY2014, the Group’s revenue surged 55.4% to S$89.1 million from S$57.3 million in the previous corresponding period. This was mainly due to the Construction segment achieving a 49.1% increase in revenue to S$76.9 million in 2QFY2014, as well as sales of development property surging 148.6% to S$10.5 million in 2QFY2014, from S$4.2 million in 2QFY2013. Separately, Other Income increased 52.1% to S$1.3 million in 2QFY2014, due to an increase in foreign exchange gain, management fees and interest income from associates.

As a result of the growth in construction activities, operating expenses also rose in line with expectations. Cost of construction increased by S$36.1 million from S$43.8 million in 2QFY2013 to S$79.9 million in 2QFY2014, while personnel expenses increased by S$0.9 million to S$3.3 million. However, other operating expenses decreased by 57.9% mainly due to a write back of allowance for anticipated losses of construction projects.

The Group recorded further contributions from property development projects from its joint-venture projects. Shares of results of associates surged 268.1% to S$7.6 million in 2QFY2014 due to an increase in volume or prices of development property sold.

Overall, KSH’s profit before taxation increased 13.2% to S$13.3 million. With a 43.9% lower tax expense of S$1.1 million, as compared to S$1.9 million the previous year, KSH’s net profit for 2QFY2014 rose 24.1% to S$12.3 million.

For the half year ended September 30, 2013 (1HFY2014), the Group’s total revenue increased 53.2% to S$172.3 million from S$112.5 million for the corresponding half year ended September 30, 2012 (1HFY2013). This was mainly due to a 49.4% increase in construction business to S$148.6 million in 1HFY2014, and a 102.5% increase in sales of development property to S$20.6 million in 1HFY2014.

As at September 30, 2013, the Group maintained a healthy balance sheet and working capital position, with cash and cash equivalents of S$76.2 million. The Group’s earnings per ordinary share and net asset value per ordinary share stood at 5.69 cents and 48.61 cents respectively, as at September 30, 2013.