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Revenue increased by 77% to $151.7 million, contributed mainly from the much higher construction activities for the Joint Venture Changi Airport project. Revenue of $4.3 million was recognized for Property Development in relation to the sales of units at Shine@TuasSouth. About 5% of the units at Shine@TuasSouth were sold as at 30 September 2018. Rental income from Investment properties remained insignificant.
Gross profit increased by $4.3 million (+49%) to $13.2 million mainly due to the higher revenue from the Civil Engineering segment. Gross margin for the ongoing projects was lower for the current financial period. No contribution of gross profit from Property development segment despite of sales recognition , as the Shine@TuasSouth project is not expected to be profitable due to current subdue market conditions.
Other income reduced by $312,000 (-11%), as the interest income was about $600,000 lower, offset by the foreign exchange gain of about $300,000 recognized for the USD holdings.
Administrative expenses was $4.0 million, about 23% higher than same period last year mainly due to the share of litigation expenses for the on-going arbitration hearing for the Jalan Gali Batu Deport joint venture project which amounted to about $500,000.
Impairment loss on investment securities of $250,000 was relating to default payment of a fixed rate bond (financial asset at amortised cost) due for redemption. The revaluation loss for the investment securities measured at fair value through profit or loss was $0.1 million for the current financial period.
Other operating cost was $0.5 million, about $0.3 million (+ 103%) higher than same period last year, mainly due to the property maintenance cost for Shine@TuasSouth project after TOP.
The share of result of joint venture of $1.2 million was the cost saving realized for the Skywoods joint venture project as final account was settled with the contractor.
The effective tax rate was lower than the effective tax rate of 17% of Singapore corporate tax rate mainly due to about $280,000 excess tax provision for previous years written off in current financial period.
Profit before taxation increased by $4.0 million to $12.0 million, resulting mainly from the higher revenue, share of profit of joint venture, offset by the higher administration cost and impairment in investment securities.
Financial position and cash flow review
The main movements are:
As at 30 September 2018, the Group's order book for on-going projects of civil engineering segment was approximately $675 million ( based on new revenue, SFRS(I)15, recognition standard) for the Maxwell station, the two Changi Airport projects and Stabling at Gali Batu Depot.
The Group's industrial development project, Shine@TuasSouth, has obtained TOP on 1 August 2018. With the Tuas Mega port slated to open progressively from 2021, the management will continue to monitor the market conditions, increase the marketing effort to sell or lease the unsold units. The Mattar Road residential joint venture project is in the phase of design finalization. The sale launch is expected in 3Q 2019.
The management will continue to tender for infrastructure projects competitively and explore other business opportunities in property related segment to enhance the shareholders' value.