Third-quarter gain rises to $78.5m as projects generate higher revenue
THE feel-good factor igniting the residential property market – and starting to take hold in the commercial sector – had a dramatic effect on Keppel Land’s bottom line in the third quarter.
Profit and turnover both soared, as buyers flocked to condominium launches across the island, while sales overseas were also buoyant.
‘The low interest rate environment and greater optimism about the economy and job market have continued to improve the market sentiments driving the housing market,’ the group said in a statement yesterday, as it released its numbers for the three months ended Sept 30.
It said net profit in the third quarter rose by 70 per cent to $78.5 million, from $46.2 million in the same period last year, due to higher revenue from projects and greater contributions from associated companies.
Turnover climbed by 23 per cent, from $185.8 million to $227.8 million, mainly because of progressive revenue recognition from The Sixth Avenue Residences, which Keppel Land had fully sold.
Demand for mid-tier and higher-end homes was robust in the third quarter, which coincided with pre-emptive measures taken by the Government to prevent a speculative bubble from forming in the residential market.
Both The Tresor and Park Infinia at Wee Nam have been fully sold, while about 80 per cent of the units in Madison Residences in Bukit Timah have been taken up.
The Promont at Cairnhill Circle sold seven of the total 15 units during its soft launch, while 109 of 118 units at Caribbean Residences have already been sold.
In total, about 240 units in Singapore were sold in the nine months ended Sept 30, said the group.
The office segment is also starting to pick up, with the pace of office rental decline continuing to ease ‘as business confidence returns’, Keppel Land said.
It said the strengthening of Singapore as an international financial city and the economic spin-offs from the integrated resorts put the office market in a good position to benefit from the recovery.
It is also optimistic about other Asian centres and expects the improved buying sentiment in key markets in the region to carry through the rest of the year.
Keppel Land plans to launch Riviera Cove, a 96-unit villa development in Ho Chi Minh City, Vietnam, by year end.
Profits from overseas accounted for about 35 per cent of the developer’s net earnings in the third quarter, compared with about 50 per cent for the same quarter last year. Earnings per share for the nine months were 15 cents, down from 15.7 cents a year earlier, while net asset value stood at $2.33 per share as of Sept 30, from $3.39 as of Dec 31 last year.
For the nine months, net profit was up by 9.1 per cent to $173.57 million, from $159.13 million a year earlier. Sales fell by 3.3 per cent to $623.4 million.
No dividend has been declared.
Keppel Land shares closed unchanged at $2.72 yesterday before the earnings announcement was made. The stock is up 124.9 per cent this year, outperforming the 52.85 per cent gain in the benchmark Straits Times Index.
FEEL-GOOD FACTOR
‘The low interest rate environment and greater optimism about the economy and job market have continued to improve the market sentiments driving the housing market.’
Keppel Land, in a statement
Source : Straits Times – 22 Oct 2009
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