Ley Choon returns to black for FY2017, posts Q4 profit of $3.7m

Airfield maintenance project at by Ley Choon Group Holdings at Changi International Airport.
Airfield maintenance project at by Ley Choon Group Holdings at Changi International Airport.PHOTO: LEY CHOON

SINGAPORE - Construction group Ley Choon Group Holdings swung to a fourth-quarter net profit of S$3.7 million from a net loss of S$13.5 million in the corresponding period a year ago.

This was achieved on the back of a 24.6 per cent rise in revenue to S$29.2 million for the three months to end-March, 2017.

After five sequential quarters of profitability, the Catalist-listed company also returned to full year profitability with net earnings of S$17.7 million from a net loss of S$60 million a year ago. This was underpinned by a 37.2 per cent growth in revenue to S$115.4 million.

The revenue improvement was due mainly to higher income recognised from its contracts carried out by its pipes and roads business segment, which was sufficient to offset the lower revenue recognised from the contracts for its construction materials segment.

Said Ley Choon's executive chairman and chief executive officer Toh Choo Huat: "Overall, we are pleased not just with our return to profitability but also our concurrent improvement in our financial position over the last one year. Better profit margins and the divestment of our non-core assets in accordance with our debt restructuring agreement meant that we start this new year on a much brighter footing."

During the last fiscal year, the group sold its development property at No. 241 Pasir Panjang Road and two other properties - No. 4 Sungei Kadut Street 2 and 55 Kranji Crescent - as part of its debt-restructuring agreement. The divestment proceeds will be used to repay outstanding loans.

The group also successfully concluded its renounceable non-underwritten one-for-one rights issue on May 18, 2017, which raised total net proceeds of S$8.6 million.

Mr Toh said it had a total unfulfilled order book of about S$139 million, "which will raise our revenue and earnings visibility in the coming year".