See why Oxley Holdings net income skyrocketed to S$250.8m

Spiked a whopping 37 times yoy.

For its 1QFY14 results, Oxley Holdings announced a net income of S$250.8m, up 37 times yoy, which is attributable to Completion of Contract recognition, according to OCBC Investment Research.

OCBC further noted that the net income surge comprised mainly cash earnings, not valuation gains, and almost matched the combined earnings of two of the largest domestic devolopers, CapitaLand and City Developments, in the same quarter.

"Under INT FRS 115, its 7280unit industrial project, Oxley BizHub, had its profits booked wholly upon attaining TOP over the quarter," said OCBC.

"This is known as the Completion of Contract (COC) recognition method and is required for commercial and overseas projects, unlike the progressive profit recognition (POC) method usually seen for domestic residential projects."

"We note that the full visibility of COC profits can be price catalysts for mid-small cap companies, particularly if they are not well-covered; Oxley's share price subsequently appreciated as much as 40% after its results."