Letter To Shareholders
Extracted from Annual Report 2024
Dear Shareholders,
The Singapore economy expanded by 4.4% in 2024 (versus 1.1% growth in 2023), as the wholesale trade, manufacturing as well as finance and insurance sectors benefited from the upturn in the global electronics cycle and elevated trading activity amidst shifts in global and domestic financial market sentiments. Accordingly, the domestic construction sector continued its post-pandemic recovery and tracked economic growth by expanding 4.5%, compared to growth of 5.8% in the previous year, mainly due to the increase in activities in both the public and private sectors.
The Singapore property market grew at a slower pace as figures released by the Urban Redevelopment Authority showed that private residential property prices in Singapore rose by 3.9% in 2024, compared to 6.8% increase in the previous year. This reflected subdued buyer sentiment which improved in the latter part of the year due to a combination of successive interest rate cuts and late surge in new home sales. Meanwhile, the Jurong Town Corporation market report for the fourth quarter of 2024 indicated that the industrial property market was supported by steady, albeit slower, uptick in prices and rentals amid stable occupancy rates, with new demand balanced by the completion of ongoing projects.
FINANCIAL HIGHLIGHTS
The Group recorded revenue of S$183.5 million in the financial year ended 31 December 2024 (“FY2024”) compared to S$202.0 million in the previous year. The lower revenue was mainly due to the substantial completion of Phase 2 of the Changi Airport joint venture project by December 2023, offset by the sale of industrial building units at Shine@TuasSouth and Ark@Gambas in FY2024. Our Civil Engineering segment posted revenue of S$150.2 million in FY2024 compared to S$169.4 million in the financial year ended 31 December 2023 (“FY2023”). Our Property Development segment booked sales of S$33.1 million in the year under review compared to revenue of S$32.4 million in FY2023.
Gross profit increased by S$7.2 million from S$23.2 million in the previous year to S$30.4 million in FY2024 mainly due to the finalisation of accounts as the Changi Airport joint venture project was nearing completion as well as higher revenue and gross profit contributions from the Property Development segment. Other income decreased by S$0.5 million from S$15.0 million in FY2023 to S$14.5 million in the year under review because of lower rental income contributions of S$1.7 million from the leased industrial units at Shine@TuasSouth and one-off legal cost award of S$1.1 million in FY2023, offset by higher interest income of S$0.9 million, gain on sale of fixed assets of S$0.7 million and increase in fair value for investment securities of S$0.6 million.
Net profit increased by S$5.5 million from S$26.6 million in the previous year to S$32.1 million in FY2024, mainly due to higher gross profit which was partially offset by higher administrative costs and the decrease in other income.
As of 31 December 2024, the Group’s net assets stood at S$284.5 million with cash and cash equivalents of S$159.3 million as compared to S$259.1 million and S$132.5 million respectively in the previous year.
DIVIDENDS
To reward our loyal shareholders for their unwavering support, the Board would like to propose a first and final cash dividend of 1.8 Singapore cent per share, subject to shareholders’ approval at our upcoming Annual General Meeting (“AGM”) scheduled on 23 April 2025.
FY2024 BUSINESS UPDATE
During the year under review, the Group successfully completed its Changi Airport joint venture project in relation to Phase 2 of the development of a three-runway system at Changi East. The positive financial contributions from the finalisation of accounts for this multi-year project is testament to the Group’s stringent cost management throughout the project life cycle.
In addition, the Group also sold 36 units at our multi-user industrial development at Shine@TuasSouth. To date, the Group has sold 54% and leased 41% of the total units at the industrial building, which is strategically located near the Tuas Terminal mega port, the second link to Malaysia and the Tuas West extension. The Group also monetised some units at Ark@Gambas, an industrial development at District 27, located in the northern part of Singapore.
CORPORATE SOCIAL RESPONSIBILITY
The Group strongly believes in giving back to society. In FY2024, our employees volunteered at Willing Hearts, a volunteer-led organisation with extensive outreach programmes, to prepare and pack food to help the underprivileged in our society. We were also pleased to contribute to the fundraising efforts of the bi-annual Yellow Ribbon Fund Charity Golf and Dinner to support various rehabilitation and reintegration programmes for inmates, ex-offenders and their families.
BUSINESS PROSPECTS
According to the Building and Construction Authority (“BCA”), overall construction demand is expected to range between S$47 billion and S$53 billion in 2025. The strong demand is underpinned by the expected award of contracts for several large-scale developments, such as Changi Airport Terminal 5, and the expansion of the Marina Bay Sands Integrated Resort, alongside public housing development and upgrading works. Over the medium-term, BCA expects the total construction demand to range between S$39 billion and S$46 billion per year from 2026 to 2029. This is expected to be supported by a slew of developments such as the MRT projects for the Cross Island MRT Line (Phase 3) and the Downtown Line Extension to Sungei Kadut as well as, among others, public housing developments.
The existing order book for the Civil Engineering segment stands at about S$553 million as at 31 December 2024. This mainly comprises the contracts for the Aviation Park and Serangoon North station projects. We remain committed to executing the projects on hand. The Group will also leverage our excellent credentials to secure more contracts in the public civil engineering and construction sectors in Singapore to replenish our order book.
While the domestic construction sector outlook remains healthy, the Group has had to contend with more aggressive bidding competition and rising business costs compounded by higher material prices and acute manpower constraints. Notwithstanding inflationary pressures and the challenging operating environment, we will exercise financial prudence and be disciplined in tendering for infrastructure projects where the Group is able to demonstrate its competitive edge.
The Group will proactively seek to monetise the remaining units at Shine@TuasSouth. While we are cautiously optimistic that the recovery in the private residential market may be sustained in light of improving market sentiment and moderating domestic mortgage rates, management will continue to judiciously evaluate the risk-return tradeoff in undertaking new development projects.
Looking ahead, rising geopolitical risks and the intensification of international trade conflicts could have a profound impact on the global economy and disrupt increasingly fragile supply chains. Furthermore, Singapore’s external demand outlook is expected to moderate in tandem with the slower growth expected in Singapore’s key trading partners. Against this backdrop, the Ministry of Trade and Industry has projected Singapore’s economic growth at 1.0% to 3.0% in 2025. Management will be vigilant to keep a keen eye on costs as we remain focused on the smooth execution of our existing projects while the Group selectively pursues new project opportunities to grow the business.
ACKNOWLEDGEMENT AND APPRECIATION
Upon the conclusion of the upcoming AGM, Mr Kee Guan Chua will be stepping down from his role as Executive Director of the Company. The Board would like to thank Mr Kee for his immense contributions since the Group listed on the SGX Mainboard in 2009. We are grateful that he will continue to lend his experience to oversee our Contracts and Tenders Department.
Finally, we would like to take this opportunity to thank our Board members for their invaluable guidance. We are also deeply appreciative of our management team and staff for their unrelenting commitment and hard work during the year.
While the global economic outlook remains uncertain, we are confident that the Group’s healthy financial position and astute cash flow management will position us well to capitalise on suitable investment opportunities and deliver sustainable value for our shareholders.
Chua Leong Hai
Executive Chairman
Chua Siok Peng
Executive Director and CEO