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Metro posts robust $9.3m net profit for Q2

Posted on 15 Nov 2009 | Comments Off

METRO Holdings yesterday posted a second-quarter net profit of $9.3 million, reversing losses of $4.9 million in the same quarter last year.

The main reason for the dramatic turnaround was that last year’s second quarter was hit by a $9.3 million paper loss in the fair value of its property division’s portfolio of short-term investments.

Revenue in the period ended Sept 30 rose 7.4 per cent to $36.2 million.

For the half year, net profit shot up to $22.4 million from $671,000 previously on a 5.1 per cent rise in revenue to $69.7 million.

Leaving aside the big second-quarter hit last year, the property developer and retailer attributed the robust performance to higher rental income from three of the group’s properties in China: the Metro City, Beijing; Metro Tower, Shanghai; and GIE Tower.

Metro chairman Winston Choo said he remained optimistic on its long-term growth prospects in the China property market.

As of the end of September, Metro’s five properties in China and Malaysia enjoyed healthy occupancy rates averaging 92.3 per cent despite the challenging global economic conditions.

‘At the same time, we will continue to build on the occupancy of our three newly completed properties in Beijing, namely, ECMall, 1 Financial Street and Metropolis Tower,’ he said.

During the quarter ended Sept 30, Metro’s core property division achieved revenue growth of $13.4 million, up 11.1 per cent from $12.1 million previously.

Its retail turnover rose 5.3 per cent to $22.8 million despite poor consumer sentiment, as promotional events bore fruit.

The group continued to enjoy a strong balance sheet, reflecting a healthy cash position of $201.8 million as of Sept 30.

Earnings per share for the quarter was 1.48 cents, reversing from a loss per share of 0.77 cent previously. Net asset value per share was 146.8 cents as of Sept 30, down from 148.3 cents at March 31.

Looking ahead, Metro expects a stable stream of rental income from its four Grade A properties: Metro City, Beijing; Metro City, Shanghai; Metro Tower; and GIE Tower.

On the retail side, the group expects the performance of the Singapore and Indonesian economies to continue to impact the retail trade. The group’s new Metro Department Store at the City Square Mall in Singapore had its soft opening in late September and has started contributing to its retail revenue.

Source : Straits Times – 14 Nov 2009

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Posted in Developers, Overseas Property

Tagged China Property, Diamond Wind Company, Metro, Metro Holdings

CapitaLand building more affordable homes in China

Posted on 15 Nov 2009 | Comments Off

Plans also to grow serviced apartment arm, double Raffles City developments

PROPERTY giant CapitaLand is gearing up to build more of its Raffles City developments, affordable homes, shopping malls and serviced apartments in China over the next five years.

Mr Liew (left) and Mr Lim opening CapitaLand’s ’15 years in China’ exhibition at Raffles City Singapore yesterday. — PHOTO: CAPITALAND

It had earlier announced its target of expanding China’s share of its total business from the current 28 per cent to between 35 per cent and 45 per cent within the next three to five years.

And this, said the president and chief executive of CapitaLand group Liew Mun Leong yesterday, includes building a lot more affordable homes rather than high-end housing, to meet the housing needs of ordinary people.

China’s housing demand is no small matter: The country needs 20 million homes every year, said Mr Liew.

CapitaLand, which has so far built 35,000 homes in China, will continue to build about 2,000 to 3,000 homes a year in the country, said the deputy chairman of CapitaLand China executive committee, Mr Lim Ming Yan.

That number goes up to as many as 5,000 homes a year, if its strategic partnerships are included, he said.

Mr Liew also wants to have a total of 10 Raffles City developments in China in five years’ time, up from the current five.

No. 6 is already ‘cooking’, he told The Straits Times yesterday at the opening ceremony of CapitaLand’s ‘15 years in China’ exhibition at Raffles City Singapore.

He said he could not disclose the location as negotiations are ongoing.

The group launched its fifth Raffles City project in China – in Ningbo – in June this year.

It also has completed Raffles Cities in Shanghai and Beijing, and ongoing projects in Chengdu and Hangzhou.

Every Raffles City represents an investment of around $1 billion, and consists of a mall, offices and either a hotel or serviced apartments, Mr Liew said.

CapitaLand’s serviced apartment arm Ascott will also grow in China – the place to be for the ‘the depth and width of the market’, said Mr Liew.

‘China has grown an average of 10 per cent per annum for the past 30 years and is forecast to overtake the United States as the world’s largest economy by 2020,’ he said yesterday.

‘China is our most successful overseas market and will continue to grow given the demographics, massive urbanisation programme and economic growth.’

CapitaLand entered China in 1994 and has become one of the top foreign developers there. It now has more than 106 projects in more than 40 cities.

About half of its employees are in China, and many of them are Chinese nationals.

Its staff are so well-trained that many of them have been poached, Mr Liew told the audience gathered at the opening ceremony.

Meanwhile, CapitaLand reportedly said that there had been good investor response to the planned US$2 billion (S$2.8 billion) IPO of its shopping mall unit CapitaMalls Asia.

Source : Straits Times – 14 Nov 2009