Published August 13, 2009

What downturn? Design Studio has a great Q2

By VEN SREENIVASAN

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HIGH-END residential and hotel fit-out specialist Design Studio Furniture Manufacturer has lifted its second-quarter earnings a huge 191 per cent to $7.1 million, from $2.4 million, thanks to strong orders and cost control.

Mr Lim: 'We have excelled and surpassed expectations in spite of the unfavourable business climate...and expect a better performance for 2009 compared with 2008'

The increase was on a 96.1 per cent surge in turnover to $35.7 million for the three months ended June 30, from $16.3 million a year back.

The Q2 result raised the company's January-June earnings 176 per cent to $11.4 million, from $4.1 million profit a year earlier. Revenue for the first six months was up 96 per cent to $58.3 million, from $29.8 million previously.

The interim bottom line almost matched full-year profit last year, when net income was $12.8 million.

Design Studio ended the first half with an order book of $193.4 million and cash of $27 million.

Executive chairman and CEO Bernard Lim attributed the strong growth to the traction the company has gained through high-value projects in Singapore and overseas, especially the Middle East.

'Our ability to clinch niche projects and implement stringent cost control has paid off in the challenging economic environment that has prevailed since 2008 and into the first half of this year,' he said. 'To share the fruit of success with our shareholders, we propose to declare an interim dividend of 1.25 cents per share.'

This surpasses the one cent per share the company paid for the whole of 2008.

All business segments grew during the latest Q2, though the interior fit-out segment - which accounted for half of total revenue in Q1 09 - stood out with 273 per cent growth.

Design Studio is upbeat on prospects after an improvement in property market sentiment here.

'We will continue to develop and expand on our capabilities to grow and thrive,' Mr Lim said. 'And we remain committed to finding innovative ways to create and deliver cutting- edge designed products of great value to meet global market needs.'

The company remains plugged into the Middle East, where it is engaged in several major projects including a $27 million contract for one of the largest urban developments in Abu Dhabi. At home, one of its single biggest projects in Singapore is Reflections at Keppel Bay, worth $27 million.

'We have excelled and surpassed expectations in spite of the unfavourable business climate,' Mr Lim said. 'We are on schedule to complete a number of local and overseas projects in the second half of 2009 and expect a better performance for 2009 compared with 2008.'