CONSTRUCTION company Lum Chang posted a net profit of S$3.7 million for the second half of its 2024 fiscal year ended Jun 30, reversing its net loss of S$29.3 million over the same period last year.
Revenue for H2 FY2024 rose 36 per cent to S$267.8 million, from S$196.7 million in the year-ago period. Earnings per share stood at S$0.0099 per share, compared to a loss per share of S$0.0779 in H2 FY2023.
The higher net profit was due mainly to cost savings from the finalisation of accounts with subcontractors and customers for completed construction projects, said Lum Chang on Tuesday (Aug 27).
Net losses in FY2023 were due to higher costs arising from prolonged construction periods and greater expenses for materials, labour and subcontractors.
Higher contributions from its construction business led the increase in revenue, the company said. However, this was partially offset by lower revenue from the property segment.
The construction business was boosted by improved levels of construction activity at ongoing projects as well as the commencement of new projects in FY2024.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Meanwhile, the property segment had lower revenue due to slower sales from developments in Singapore. Residential development sales in Malaysia were the main revenue contributors to the property business.
For the full year, net profit came in at S$7.4 million, a reversal of the S$28.7 million net loss in FY2023.
Revenue increased 27 per cent to S$500.4 million, from S$393.4 million in the previous fiscal year. Earnings per share stood at S$0.0196 per share, compared with a loss per share of S$0.0761 in FY2023.
The company recommends an interim dividend of S$0.005 per share, with a final dividend of S$0.01 per share.
Despite the growth in the construction sector, Lum Chang anticipates that challenging operational conditions will persist due to an increasingly competitive tendering environment, high material costs, shortage of manpower, and rising construction costs overall.
“The group’s construction division continues to remain focused on shortening delays and executing the order book on hand, while managing overheads and manpower requirements,” it said, adding that it will “pursue new projects selectively”.
As at Jun 30, Lum Chang’s outstanding value of construction projects in progress stood at S$1 billion.
Shares of Lum Chang fell 1.7 per cent, or S$0.005, to close at S$0.29 on Tuesday.
