Higher construction costs, impairment loss dent TA Corp's profit

SINGAPORE - Increased construction costs have dragged property and construction firm TA Corp's profits lower.

Net profit for the fourth quarter ended Dec 31 dropped 58.4 per cent to $3.9 million even though revenue rose 10.1 per cent to $88.2 million.

Other operating expenses jumped nearly five times to $6.5 million, while finance costs rose more than three times to $1.5 million.

For the full year, profit declined 30.6 per cent to $20.3 million despite revenue rising 1.9 per cent to $302.9 million, as other operating expenses hiked 90.9 per cent to $10.3 million.

The company saw higher construction costs and was also adversely affected by a $5 million impairment loss on its development properties.

Earnings per share fell to 4.4 cents from 6.3 cents previously, while the net asset value per share rose to 52.6 cents from 48.9 cents previously.

A first and final cash dividend of one cent per share has been recommended, unchanged from the previous year.

It expects the challenging outlook for Singapore's private residential property market to persist.

But it remains confident about the construction segment's performance, which boasts an order book of $336 million as of Dec 31.

TA Corp chief executive Neo Tiam Boon said: "Despite the weak property market in Singapore, I am encouraged that the group was successful in delivering a credible financial performance that reflects the resilience and strength of our business units."