Falling margins have dealt a blow to construction group Lian Beng, which reported a 24.3 per cent drop in net profit to $39.4 million.
This was despite a 13.6 per cent rise in revenue to $505.6 million for the year ended May 31.
Gross profit slipped by 11.6 per cent to $65 million, resulting in a 3.6 percentage point fall in gross profit margin to 12.9 per cent.
Construction projects experienced lower gross margin.
While revenue contribution of ready-mixed concrete had increased, gross margin was generally lower than construction margins.
The sharp drop in net profit was also due to the absence this year of a one-off gain that netted $7.9 million for the group last year.
Investment properties increased from $66.2 million to S$136.6 million as at May 31, mainly due to the purchase of two Emerald Hill residential units, progressive payment for long term investment in residential units, and development cost for the Mandai workers' dormitory.
Development properties also increased, from $96.7 million to S$162.4 million, largely due to the increase in costs incurred for Lincoln Suites, M Space, Spottiswoode Suites and The Midtown @ Hougang.
Lian Beng's cash and cash equivalents remained strong at $170.9 million.
Earnings per share decreased to 7.45 cents from 9.83 cents previously while net asset value per share firmed by 5.51 cents to 49.2 cents.
The company has proposed a final payout of 1.25 cents, down from two cents last year.