Income Statement. Source: Company, Jack Phang Compilation
EPS for 2H 2014 was 9.38 cents, about 55% of total EPS for FY2013. If you look at what management mentioned, $55.2 million recorded in 2QFY2013, with revenue of $207.3 million for 2QFY2014 reflecting a mere 0.5% decrease from $208.3 million in 2QFY2013. The increase in Group’s profit before tax is primarily attributed to reduced contract costs. Revenue from Property Development division contributed $156.9 million to the Group's revenue in 2QFY2014, compared to $170.1 million in 2QFY2013. The decrease of 7.8% is mainly due to reduced revenue contribution from Waterview project as it is in the later stage of the construction, partly offset by increase in revenue contribution from Parc Vera project which is in the peak of the construction cycle. The other development projects of the Group are accounted for on COC method. The Group saw its construction division contribute $42.1 million to its revenue, an increase of 33% from the $31.7 million in 2QFY2013. The higher revenue contribution is due mainly to increase in percentage of work done. The Group incurred contract costs of $125.2 million, 16% lower than the $148.2 million incurred in 2QFY2013. Contract costs have decreased after we have finalised the contract costs for our projects.
The Net Profit Margin surged to 31.92% in 2Q2014 quarterly report, mainly attributable to reduced contract costs. To me, it is quite impressive as the company still managed to control the project costs well. Maybe we have to wait for another 2 more quarters to check if this is an one-off event or a trend that the company could cope with difficult situation especially due to labor tightening policy started a year ago.
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