Tiong Seng

Tiong Seng: 2Q13 net profit shrank 65% y/y to $3.4m on steady revenue of $131.6m (+1%). The drop in earnings were due to lower share of profit of joint ventures as compared to the previous corresponding period, as its newly commenced joint venture projects have yet to reach the revenue recognition milestone. For 2Q13, contruction contracts revenue sank 18% y/y to $103.7m, mitigated by the contribution from sales of development properties of $25.1m from no contribution in the previous period. For 1H13, contruction contracts rose 9% y/y to$247.7m due to the increase in work done for Waterway Terraces I & II, The Glyndebourne, The Archipelago, The Luxurie, Joo Koon Integrated Hub & Fairprice Distribution Centre and SIM HQ campus extension. As of 30 Jun, approximately $11.1m of work done from newly commenced projects in Singapore were yet to be recognized as revenue, while gross margin improved from 8.6% to 13.6% in 2Q2013 and 10.5% to 11.1% for 1H2013. Robust order book of $1.26b will see continued activity over the next 30 months. Group has taken steps to improve productivity and control production costs with its investments in precast facilities in Iskandar, Malaysia, as well as Myanmar during the quarter. The Group’s expansion into Malaysia serves to feed the rising demand for housing in Singapore and Malaysia, while the Myanmar venture will tap on the country's plans to build an average of 50,000 homes annually over the next 20 years.