Lian Beng: 3QFY16 net profit slipped 5.3% y/y to $17.4m, bringing 9MFY16 earnings to $72.6m (+34.7%).
For the quarter, revenue tumbled 49.8% to $101.6m due to decreased sales from the construction and ready-mixed concrete segments.
However, the bottom line was buttressed by increased contributions from associates and JVs to $16.5m (+101%) from various property projects including NEWest, KAP Residences, The Midtown and Midtown Residences and the strata sales of office building at Prudential Tower.
Net gearing inched up to 33.8% (+1.8ppt q/q), supported by a cash pile of $188.2m.
In 3QFY16, the group secured a $117.6m contract to build an industrial building project, T-Space, at Tampines North Drive 1. This boosted its construction order book to $384.5m (2QFY16: $350m), with visibility stretching through FY19.
On the outlook, management still remains cautious on the construction industry due to the challenging environment, hurt by high labour cost.
Lian Beng is currently trading at a trailing P/E of under 2x and 0.47x P/B, and offers an indicative dividend yield of 2.1%.
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