SINGAPORE - Real estate company Hong Lai Huat (HLH) Group posted flat profit of $4.15 million for the three months ended March 31, 2018, despite stronger property sales boosting revenue to $16.78 million, up three times from a year ago.
The bottom line was impacted by an increase in administrative expenses to $3.07 million from $1.48 million a year ago, mainly due to depreciation of $0.9 million, sales commission of $0.3 million and a Cambodian lump sum tax of $0.5 million.
The group also incurred other expenses of $1.2 million, attributed to an unrealised exchange loss of $1 million.
HLH's first quarter revenue was lifted by stronger property sales at the group's D'Seaview project development in Sihanoukville, Cambodia. The property segment contributed the lion's share of the group revenue at 93 per cent.
D'Seaview is HLH's first freehold mixed-use development venture in Cambodia, comprising of 737 residential units and 67 commercial units. The four blocks of commercial spaces include a mix of commercial shop houses, retail units, office buildings and a boutique hotel.
As at March 31, 2018, more than 80 per cent of the project's commercial units and 60 per cent of the residential units have been sold, HLH said in an exchange filing.
Looking ahead, HLH - which owns some $6.7 million worth of cassava crops for cultivation - said that it will continue to optimise its cassava and starch production techniques and capabilities, as well as pursue divestments of its agricultural assets in Cambodia.
The group's executive deputy chairman and chief executive Johnny Ong said that the board was "pleased with the group's strong performance in Q1 2018", with D'Seaview drawing interest from local and foreign buyers.
"This validates our strategy of delivering quality developments at reasonable prices, and is indicative of the overall strength and potential of the Cambodian property segment, which we continue to be very positive on," Mr Ong said.