Koh Brothers' profit soars 22% to S$5.4mln

Group is cautiously optimistic that first semester performance to continue behind Singapore's 18% GDP growth.

Koh Brothers Group Limited (“Koh Brothers” or the “Group”), a well-established construction, property development and specialist engineering solutions provider, on Wednesday announced a 22% increase in net profit attributable to shareholders (“Net Profit”) to S$5.4 million for the first half ended 30 June 2010 (“1HFY2010”), compared to S$4.4 million in the previous corresponding period (“1HFY2009”). This was achieved on the back of a 27% increase in sales to S$176.7 million primarily generated by the Group’s Construction and Building Materials division.

The Group’s profit before tax (“PBT”) also rose by 57% to S$6.4 million in 1HFY2010 compared to S$4.1 million in the previous corresponding period, according to a Koh Brothers report.

For the 3-month period ended 30 June 2010 (“2QFY2010”), sales rose 18% to S$91.8 million as compared to S$77.7 million for the same corresponding period last year (“2QFY2009”). The Group’s PBT declined by 12% to S$2.7 million in 2QFY2010 from S$3.1 million in 2QFY2009 due to a 16% fall in gross profit resulting from reduced profit margins from the Group’s Building Materials subsidiaries.

Said Mr Francis Koh, Managing Director and Group CEO of Koh Brothers: “We have remained resilient and are glad to have achieved an increase in net profit for our shareholders for 1HFY2010, on the back of an improved revenue. Going forward, in line with the upbeat economy and positive sentiments for both the construction and property segments, our core business divisions, we are optimistic of good growth opportunities.”

Outlook
The Singapore economy grew by 18% in the first half of 2010. The Ministry of Trade and Industry (“MTI”) has now forecasted a growth of 13% to 15% for 2010.

The general market sentiment for the residential property market remains positive. The Group will continue to monitor the market closely and release more residential units for sale at the appropriate time. As for its Construction division, the Group is encouraged by the Government’s decision to sustain the current level of infrastructure expenditure. However, pricing in the Group’s Building Materials division remains competitive.

The outlook for the Hospitality division has improved, with an increase in occupancy rate. The Group is cautiously optimistic that this trend will continue.