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Total revenue increased by $33.0 million (+28%) mainly contributed from the Civil Engineering segment which recorded an 27% rise in revenue to $149.6 million. This was attributable to the much higher contribution from Changi Airport JV project which has progressed to a more active phase in 2017. Revenue for Property Development segment was related to sales of unit at Ark@Gambas. Revenue from Investment property segment remained insignificant.
Gross profit decreased by $3.2 million ( -11%) to $27.1 million for the current financial year, mainly due to the drop in gross profit from the Civil Engineering segment as reversal of maintenance provision was lower than FY2016 and the lower gross margin for the ongoing projects. The contribution from Property Development and Investment properties is not significant.
Administrative expenses was $5.3 million, marginally lower than FY2016 mainly due to lower performance bonus provision offset by the higher staff costs and share of administration costs of the Changi Airport JV project.
Other income was $0.9 million lower mainly due to the reduction in interest income.
Provision for impairment loss of investment securities of $1.1 million were due to the provision of default risk for some held-to-maturity investment securities.
Other operating cost increase by $767,000 mainly due to exchange loss arises for the revaluation of USD holdings for USD committed material purchases.
The share of profits from the joint venture was only $490,000 as JV residential project, The profit of Skywoods has been fully recognized in previous years. Current year profit was relating to write back of project cost.
Profit before taxation decreased by $16.3 million to $24.0 million, resulting mainly from $11.0 million lower profit from Joint Venture and lower gross profit of about $4million from the civil engineering projects, higher provision of impairment of loss for investments securities.
Financial position and cash flow review
The main movements are:
As at 31 December 2017, the Group’s order book for on-going projects of civil engineering segment was approximately $775 million for the Maxwell station, the two Changi Airport projects and Stabling at Gali Batu Depot. The construction of the Group’s new industrial development property at Tuas (Shine@Tuas South) has commenced and is expected to be completed in second quarter of 2018.
BCA projected the total value of construction contracts to be awarded this year to reach between $26.0 billion and $31.0 billion, with 60% of the projects coming from the public sector. The public projects will include infrastructure projects like the North-South Corridor, remaining package for Runway 3 by Changi Airport Group. The management will continue to tender for infrastructure projects competitively and explore other business opportunities in property related segment to enhance the shareholders’ value.