Continental Holdings Corp (欣陸控股) said it is confident earnings will improve for the rest of the year after swinging to profit in the first quarter as losses from civil construction projects overseas stabilized and clouds over the local property market have begun to lift.
“The landscape looks less bumpy ahead,” chief executive officer Ken Hung (洪義乾) told a news conference in Taipei ahead of the firm’s annual shareholders’ meeting on June 7.
The conglomerate, whose main business interests include Continental Engineering Corp (大陸工程), Continental Development Corp (大陸建設) and Hsin Dar Environment Corp (欣達環工), posted net income of NT$296.27 million (US$9.82 million) for the first quarter, or earnings per share of NT$0.36.
That was the second consecutive quarter of profit and reversed a loss of NT$7.22 million in the same period last year, a company filing with the Taiwan Stock Exchange showed.
Continental Engineering, which generated more than 80 percent of Continental Holdings’ revenue last year, is reining in losses from construction projects in India, Hung said.
Since 2005, Continental Engineering has worked on civil construction projects in the South Asian country, but regulatory and bureaucratic barriers have brought disruptions and made its efforts unprofitable.
The engineering arm is to pull out of the Indian market after it wraps up its remaining projects this or next year, Hung said.
It would refrain from doing business in emerging Asian nations in the future, instead focusing on Hong Kong, where the market is open and advanced with a larger civil construction budget than Taiwan, Hung said.
It does not plan to tap ASEAN markets under the government’s “new southbound policy,” because such a move would require vast financial and human capital, as well as bring high risks, Hung said.
Instead, it has won contracts to build an underground railway system in Tainan and parts of New Taipei City’s metro system, Hung said, adding the projects could bring in more than NT$20.99 billion in revenue.
The property development wing is expected to be the group’s profit driver this year after generating NT$1.11 billion in net income last year, Continental Development chairman Christopher Chang (張良吉) said.
“I have spotted light at the end of the tunnel” after years of a sluggish market, Chang said.
Continental Development is to benefit from recognition of profits from projects in Taipei and Taichung, in addition to rental income from a commercial office building, Chang said.
The developer aims to launch NT$40 billion of presale and newly completed projects this year, with an apartment building in Taipei’s Zhongshan District (中山) to enter the market in the third quarter, he said.
The building will have 24 floors above ground and six basement floors, Chang said.
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