Lian Beng 9-month FY 2010 profit up 52%

Group expects further growth of company’s $17mln net from the booming private residential building sector.

Building construction company Lian Beng Group has reported a 52% growth in net profit attributable to shareholders to $17.4 million, or 3.28 cents per share, for the nine months of its 2010 financial year. This compares to a net profit of $11.4 million, or 2.16 cents per share, a year ago. This was on the back of a 4.5% improvement in revenue to $240.5 million.

Leveraging its participation over several areas of the construction value chain, including its ready-mix concrete facility, fleet of construction equipment and in-house scaffolding capabilities, the Group also managed to achieve an improvement in gross profit margin to 13.1%, from 11.2%.

The Group also ended the nine-month period with a stronger balance sheet. Cash and cash equivalents stood at $49.8 million as at 28 February 2010, representing an improvement of $43.1 million over $6.7 million as at 28 February 2009.

The Group continues to enjoy brisk business activity flowing from the buzzing local private residential scene. Just this week, Lian Beng announced that it had clinched a new contract to build The Laurels, marking the Group’s third contract secured within a month. The other two contracts, secured earlier in March, were for the construction of Centro Residences and Waterbank at Dakota. These, together with construction contracts for Waterfront Key and The Gale awarded in the first half of the financial year, has added some $530 million to the Group’s order book.

The Group’s order book stands at $850 million as at 31 March 2010. Demand for construction services is expected to come from the private residential sector as well as public infrastructure projects, which is gradually making a comeback following a continued uptrend in the country’s economy.

These developments bode well for the Group, which has a strong track record in the private residential sector, and the relevant accreditation to handle public projects of unlimited contract value. Accordingly, the Group will leverage its experience and capabilities to tender for more private and public sector projects.