Hock Lian Seng (J2T) H1 2023 earnings summary

Executive summary

• H1 2023 revenue rose 90.9% YoY to $106.2m; profit before tax increased 24.2% to $11.0m and profit after tax increased 16.7% to $8.9m.

• Higher construction activity and industrial property sales lifted revenue, while squeezed civil engineering margins and a swing to JV losses moderated profit growth.

Financial highlights

• Gross profit increased 51.5% YoY to $6.8m; other income rose 48.6% to $7.4m, including a $1.1m arbitration legal-cost award.

• Tax expense increased 72.0% to $2.1m; profit attributable to owners was $8.9m, up 15.1% YoY.

• Other comprehensive income included a $0.2m fair-value loss on FVOCI financial instruments; total comprehensive income was $8.7m.

Outlook and guidance

• Civil engineering order book stood at ~$789m at 30 June 2023, mainly comprising Aviation Park and Serangoon North station projects.

• The CAG joint-venture project was expected to be substantially completed by end-2023.

• Shine @ TuasSouth had sold 21% and leased 77% of total units; interest in industrial units had picked up since early 2023.

• Results were in line with the general outlook commentary previously given for FY 2022.