New accounting standards that ate into profits from a Catalist-listed spin-off affected earnings at construction player Lian Beng Group in the first quarter.
Net profit fell 38.9 per cent year on year to $6.97 million for the three months to Aug 31, it said on Friday. This was despite revenue rising 15.9 per cent to $83 million on higher turnover from construction and investment holdings.
The earnings fall was down largely to SLB Development, of which Lian Beng holds 74.41 per cent, running into the red due to tweaks that led it to progressively recognise revenue contributions rather than booking them all at once. Besides hitting Lian Beng's top line, this also pushed down the share of results to $1.49 million in losses, compared with $1.19 million in earnings in the year before.
Meanwhile, other operating income fell from $10.5 million to $2.22 million on a high base effect from the disposal gains for investment properties in Melbourne the year before. Earnings per share fell to 1.39 cents from 2.28 cents, while net asset value was 135.79 cents a share, against 135.1 cents as at May 31. No dividend was recommended for the period, unchanged from a year ago.
Executive chairman Ong Pang Aik said in a statement: "Despite the impact of the change of accounting treatment reflected in this quarter, the overall performance of the group has been encouraging and we look forward to the contributions from the property development and construction segments."
The group expects recurring income from investment properties and is "cautiously optimistic" on the construction sector.