This year marks our 45 years of achievements. From a modest beginning in 1966, we have steadily grown into a highly reputed infrastructure and civil engineering specialist.  

The extensive experience we have gained from the completion of major government projects in the last 45 years have reinforced our technical expertise and knowledge. Projects such as the Changi Water Reclamation Plant, Common Services Tunnel, the iconic Marina Barrage, LTA Contract 903 for Downtown Line 1 Bugis Station and Punggol Waterway have endorsed Koh Brothers’ hallmark of quality and reliable track record as a home-grown infrastructure and civil engineering specialist.

Over the years, the Group has not only undertaken numerous construction and infrastructure projects but also successfully developed a brand name for ourselves as a niche real estate developer, with an established reputation for quality and recognition for our lifestyle-themed property developments. We will continue to build upon and further expand on this strategy.

As we celebrate our 45th anniversary, I am pleased to report that we have delivered a satisfactory set of results for FY2010.

The Group reported a net profit attributable to shareholders amounting to $12.3 million, a 15% increase for FY2010, as compared to S$10.7 million in FY2009. This was achieved on the back of a 10% increase in revenue to S$364.3 million,  primarily  generated  by  our Construction and Building Materials division. Profit before tax improved by 24% to S$13.2 million.

The Group maintained a healthy balance sheet with cash and bank balances of S$61.6 million as at 31 December 2010, compared to S$43.0 million as at 31 December 2009.

PROPOSED DIVIDEND

The Board of Directors has recommended for approval at the forthcoming AGM, a first and final cash dividend of 0.35 cent per ordinary share to be paid out for FY2010. Upon approval at the AGM to be held on 29 April 2011, the proposed dividend will be paid on 20 May 2011.

CONSTRUCTION SECTOR - BUILDING UP MOMENTUM

According to the Singapore Building and Construction Authority, total construction value in 2011/2012 is projected to be between S$18 billion and S$25 billion. Public sector is likely to account for about 55% of the total projects. This is in line with the government’s policy statements addressing the need to build more HDB flats and enhance public transport infrastructures, which will in turn spur demand for construction and basic building  materials. At the same time, the award of public transport project tenders will also drive civil engineering works. Due to the buoyant economy, real estate developers are still bidding aggressively for land rolled out from the Government Land Sales programme to boost their land banks, not withstanding the  recent anti-speculative measures. This should augur well for private construction demand in coming years.

Looking ahead, the Construction industry will continue to see robust demand in the next two years. With our strong foundation and engineering expertise, our Group is confident to secure more projects in the near future and tap into emerging opportunities of the promising building and construction industry towards our next wave of growth.

PROPERTY SECTOR - PICKING UP SPEED

Backed by a robust economy, Singapore’s residential property sales momentum remained strong through 2010. The total take-up rate of new private residential homes for the year totalled 15,832 units, compared to 14,688 units in 2009. Private residential home prices also climbed 18% in 2010, much faster than the 2% increase in 2009.

We will continue to tap on the Government Land Sales programme to prudently replenish our land bank. This will be carried out with a strong focus on cost discipline, through cautious pricing of our land bids and management of construction costs. We intend to use our proven, disciplined capital recycling capabilities to maximise total return to our shareholders by working with joint venture partners and shortening time to launch.

LEISURE AND HOSPITALITY – GROWING TRENDS

Visitor arrivals to Singapore in 2010 registered a strong 20% growth with a record high of 11.6 million, surpassing the 9.7 million in 2009. Tourism spending hit an all-time high at S$18.8 billion in 2010, exceeding the S$12.8 billion in 2009. The successful openings of the two integrated resorts have contributed to  an  ‘exceptional  year’  in  2010  for  the Group’s Leisure and Hospitality division.

PEOPLE POWER

Human capital plays an  instrumental role in the success of our Group. Our corporate culture is very much driven by our core values that run through every echelon in the hierarchy of our workforce. This culture has kept our workforce cohesive, enabling optimal productivity and operational efficiency at all times.

The Company also adopts stringent policies that select the right person for the right job. We encourage continuous training and upgrading to realise the full potential of each employee. We try to cultivate our talents from within the organisation and constantly explore new methodologies through learning and sharing with one another so as to motivate and inspire our workforce to inculcate an environment of greater job satisfaction and fulfilling career development.

OUR STRATEGIC FOCUS AHEAD

According to the Ministry of Trade and Industry, Singapore’s economy is forecasted to grow between 4% and 6% in 2011. This relatively buoyant forecast, along with strong growth in Asia, should continue to sustain market confidence and stimulate the property and construction industry.

Around 55% of the construction demand in 2011 is expected to come from the public sector. Riding on our proven expertise and track records in building and civil engineering works, we will actively collaborate with various government agencies and seek out more infrastructure projects in MRT Downtown Line 3, other PUB projects as well as estate renewal programmes by the HDB and other organisations. We are optimistic of furthering the growth and development of our Construction and Building Materials division.

The recent government measures to cool the buoyant property market have shown some effects on deterring rampant property speculations. We believe that this is healthy in the longer term, as genuine buyers will not be crowded out of the market. We will continue to expand our land bank by identifying locations that cater to the lifestyle needs of prospective home buyers and undertaking more ‘lifestyle-and-theme’ developments in the future.

The openings of the two integrated resorts along with more business and leisure travellers arriving in Singapore each year offer a favourable operating  environment for our refurbished Oxford Hotel and augur well for the future of our Leisure & Hospitality division. The division will continue to ride on the flourishing tourism industry to generate promising yields for the Group in the years to come.

BEYOND 45 YEARS OF GROWTH

By staying innovative and enterprising, the Group is ready for any challenges ahead. We will strive to better the 45 years that have propelled us to where we are today, and make constant progress with disciplined prudence. We will continue to harness our foresight and individual core competencies, to forge ahead with our sound technical expertise and strong foundation to develop more innovative  solutions, build a network of valuable alliances and invest wisely in key business areas and markets for long term sustainability and growth for the entire Group.

ACKNOWLEDGMENTS

On behalf of the Board of Directors, I would like to take this opportunity to express my sincere appreciation to our customers, business partners, bankers and financial institutions, government authorities and shareholders for their support. We  would not have made this milestone and celebrate our 45 years of pride without the dedication and hard work of our management and staff. Their remarkable performance and devotion deserve my commendation. Let us continue to forge ahead as one formidable force towards greater success in our next phase of growth.