Fair value gains push up Chevalier profit

Fair value gains push up Chevalier profit

Danny Chung:

 

 

Net profit at construction to information technology company Chevalier International Holdings (0025) has jumped by over half thanks to fair value gains on investment property and other investments.

For the year ending 31 March 2013, the profit attributable to shareholders was HK$1.01 billion, up 53.8 percent on a year ago while revenue edged up 8.8 percent to HK$4.19 billion.

In a stock exchange statement last Thursday, the company attributed the increase in profit to mainly fair value gains of investment properties as well as securities and financial derivatives investments.

In particular, the gain in fair value of investment properties was HK$670 million compared with HK$256 million recorded in the previous year.

The company also noted “remarkable growth in profit from operations”.

By segment, the revenue for construction and engineering, including that of associates and jointly controlled entities, was up 9 percent year-on-year to HK$3.87 billion.

The increase was due mainly to increases in revenues from aluminium windows and curtain walls, electrical and mechanical engineering and building materials supplies projects in Hong Kong and Macau, and from lifts and escalators associate companies in China.

However Segment profit for the sector jumped 44.5 percent to HK$302 million.

Still the company warned of difficulties in attracting staff.

“In response to rising materials and labour costs driven by tremendous market demands, the Group has carried out strategic measures like increasing usage of prefabrication and developing construction initiatives in design and technology for higher productivity,” chairman Chow Yei-ching said.

Current projects include alterations at Sha Tin Racecourse, mixed use building projects at Sham Hui Po and Tai Po and electrical and mechanical works for Galaxy Phase 2 in Macau.

The company saw segment revenue from property development climb 34.9 percent to HK$831 million.

Apart from mainland China projects in Changchun and Chengdu, the company has entered the market for developing housing for seniors in Oregon and North Carolina in the US.

The company declared a final dividend of 65 HK cents to make up a full year dividend of 85 HK cents, up 54.5 percent compared with the year before.

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