GUOCOLAND has posted a net profit of $12.4 million for the first quarter ended Sept 30, a sharp reversal from the $2.8 million loss a year ago.
Earnings improved even as turnover fell 37 per cent to $95.7 million. Profit per share was 1.5 cents, in contrast to the loss per share of 0.34 cents a year ago.
Gross profit was driven largely by contributions from property development projects in China. The group recorded higher sales in Ascot Park in Nanjing and the Changfeng project in Shanghai. Property development projects in Singapore contributed less as several had been fully sold and completed in the previous year.
A net foreign exchange gain of $7.5 million – comprising unrealised translation gains on US dollar borrowings – also boosted earnings in Q1. Previously, the group had recognised a net forex loss of $19.2 million.
‘In tandem with the rebound in stock markets, buyers’ confidence in property markets, especially in Singapore and China, have strengthened with strong pick-up seen in both residential sales and prices,’ GuocoLand said. It launched Sophia Residence and Elliot in the East Coast during the quarter and both projects have chalked up sales of 86 per cent and 64 per cent respectively.
These two projects did not contribute to profits in Q1 because they have not been built.
GuocoLand added that it will continue to monitor the property markets and ‘time its property launches accordingly’. It will also look for opportunities to replenish its land bank.
Shares of GuocoLand fell 5 cents yesterday to close at $2.06.
Source: Business Times, 17 Oct 2009
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