Chip Eng Seng warns of net loss amidst COVID-19 impact
This was mainly due to adverse effects of COVID-19.
Property developer Chip Eng Seng has issued a profit warning for FY2020 as it expects to have a net loss compared to its FY2019 net profit of approximately $32.6m, amidst the “adverse impacts of COVID-19 on the group’s businesses.”
According to the warning, the net loss incurred by the group for the whole of FY2020 will be wider than the $25.7m net loss reported for H1 2020.
Construction works for its Grandeur Park Residences, Park Colonial and Parc Komo properties were interrupted due to the closure of their construction sites for several months in FY2020, which in turn affected revenue recognition and progressive payments from property buyers.
Moreover, there was a recogniseable negligible revenue on Kopar at Newton for the period, as the construction progress was “very much in the initial stages,” according to the group.
Despite relatively healthy sales figures garnered by the projects for H2 2020, the group was not able to recognise as much revenue from these projects as expected due to delays in construction.
“The group will continue to closely monitor its operations and the COVID-19 situation in order to adjust its measures and strategies accordingly, and will provide updates as and when any material developments arise,” it said.