BBR Holdings

[dydx]

A rather curious observation from AR 2013 on S$413.8M National Gallery project.
The losses recognized by JV:
FY2012: S$4M
FY2013: S$78M
BBR has 25% in this JV.
BBR supposed losses to be $78M x 25% = about $20M.
BBR recognized $4M losses.
The reason is probably due to below:
"Pursuant to the terms of the JV agreement, the Group’s liability is capped at $5,000,000, although it has an obligation for up to 25% of losses in the project."

Wondering will there be further implication?

From hindsight, the extent of the losses shows how technically difficult is the underlying project - especially the subterranean or underground portion, in which Yongnam is also heavily involved as a sub-contractor - and how gung-ho is the Japanese main-contractor Takenaka in bidding for and taking up the job. It also shows that BBR management is both conservative and smart - and lucky too! - in having negotiated with Takenaka a max. cap for any potential losses in their JV agreement for the project.