In line with the revenue growth, cost of sales mroe than doubled to $21.7 million compared to $9.86 million last year.
However, gross margin fell to 16.3% in 1Q18 from 28.4% in 1Q17. This was due to higher revenue in 1Q18 from the group’s development properties compared to proportionately higher rental income in 1Q17, which has higher gross margin.
Meanwhile, selling and distribution expenses increased by 224.8% to $1.99 million from $614,000 the previous year, due mainly to promotional expenses incurred for the completed properties held for sale and sales commission.
Other operating expenses widened to $178,000 in 1Q18 was due mainly to unrealised foreign exchange loss caused largely by the depreciation of Malaysian Ringgit.
In addition, income tax expenses increased to $114,000 in 1Q18 from $32,000 in 1Q17 to $114,000 in 1Q18 mainly because of higher taxable income from the higher development project revenue recognised.
In its outlook, TEE Land says the property market in Singapore is showing signs of recovery, but the overall economic environment is still uncertain as interest rate hike are expected.
Hence, the group will remain cautious in its expectations.
Shares in TEE Land closed 2 cents lower at 20 cents on Wednesday.
