Hock Lian Seng Holdings Limited - Annual Report 2015 - page 6

In the financial year ended 31 December 2015 (FY2015), uncertain economic growth
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players, manpower shortage and rising operating costs led to depressed margin for many
construction companies. At the same time, the bearish property market hampered growth
in the sector. However, we managed to secure Gali Batu Stabling Yard contract from the
Land Transport Authority (LTA) in January 2015 whilst managing two major projects, namely
the Changi Airport taxiways and aircraft parking stands project and Maxwell MRT station
project. This underscores our ability to maintain our performance despite the competitive
environment.
PERFORMANCE REVIEW
In FY2015, the Group recorded a 33% drop in revenue to $174.8 million largely due to a 54%
decrease in contribution from the Property Development segment and lower gross margin
for our civil engineering projects. Ark@KB, which obtained Temporary Occupation Permit
(“TOP”) in March 2015 accounted for 42% of the Group’s revenue during the year. It was a
much smaller project compared to Ark@Gambas, which was recognised in the previous year,
and hence resulted in the drop in both top and bottom lines.
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which saw the commencement of construction for the Stabling Yard at Gali Batu in 2H2015,
as well as the ramping up of construction of Maxwell MRT station and Changi Airport project
in FY2015. Meanwhile, revenue from the Investment Property segment was mainly attributed
to rental income from workers’ dormitory. The revenue was lower than the previous year as
the dormitory ceased operation in November 2015 due to lease expiry.
Concurrently, the share of result of joint venture was $8.0 million against $0.04 million
registered for FY2014. This was due to increased sales and further progress in the
construction works for The Skywoods project.
Dear Shareholders
Letter to Shareholders
“A new contract
valued at about
$137.4 million was
awarded by the
Land Transport
Authority to
Hock Lian Seng
Infrastructure in
January 2015 for
the Design and
Construction of
the Rail Stabling
Yard nearby.”
HOCK LIAN SENG HOLDINGS LIMITED 4